Reason has a great video about a free market healthcare system in Oklahoma. It is definitely worth six minutes of your time. By going outside the traditional insurance model, they have cut healthcare prices to a fraction of what they usually are.
A few things to clarify. This obviously wouldn’t work for people without jobs or cash to pay for these services (although it would be cheaper than Medicaid). And some of the most expensive parts of our healthcare system — long-term and end-of-life care — would not fit under this model. But, if this were applied universally, we would be talking about massive and major cuts in our healthcare bill and imminently more affordable care for hundreds of millions.
I can testify to a couple of aspects of this first-hand. I left the healthcare industry 17 years ago, but it was getting top-heavy with administrators then. I am assured by friends and relatives it has only gotten worse. It is not unusual at all for the highest paid people in a healthcare system to be, not doctors, but administrators like — oh, let’s take a random example — Michelle Obama before her husband became President.
I have also had two encounters with our healthcare system this year. The first was with the traditional system when I had my gallbladder popped out. Even that comparatively simple procedure was ridiculously expensive. But my surgeon’s fees were a comparatively small fraction of that; most was the hospital. The second was with a completely private system in our (so far unsuccessful) attempts to have a second child. Fertility isn’t cheap, but we got rigid quotes, outstanding service and doctors determined to go the last mile. At one point, we had to switch fertility medication at the last minute when the clinic was closed. The head nurse had us pick it up from her house. How often does that happen in the traditional system?
Obamacare has many flaws but the biggest is that it completely turns its back on the idea of a free market in healthcare. There is no provision for high-deductible major medical plans (again, if you’ve never read it, read David Goldhill on this). There is no incentive for innovation. Its cost controls are the kind of top-down bureaucratic bullshit that fails (if we’re lucky) or creates bad unintended consequences (if we’re not).
Oklahoma is showing the way forward. Does anyone want to follow?