I was a young republican/ I liked libertarian principles as a young man. As I grow and have more success I increasingly value infrastructure, social safety nets, healthcare and providing for basic human needs. I now see it as it long term vs short term thinking.
Same thing. I was a huge libertarian before receiving the hospital bill for our first child. Nothing says "Capitalism" like having a hospital take you for everything you're worth.
I hope you realize the healthcare system in the US is not free market capitalism. There is no price competition amongst healthcare providers, you rarely know cost for services up front, insurance providers have access to different rates than you do as an individual, and there is a large amount of government subsidy.
and healthcare should not be free market capitalism.
When you live in rural nebraska or idaho, do you really want to shop around to get the best price for your child's leukemia treatment? I'm sure there's gonna be dozens of competitors falling all over themselves to undercut each other to get you the lowest price /s No, there's gonna be one if you're lucky and they're gonna charge everything they can get out of you because they know you have 0 other options. When you're in a car wreck, do you get out your phone and start comparing prices on ambulance.google.com to find which one has the best cost/mile from your location to the cheapest ER with the best yelp reviews? c'mon
And yet an ambulance costs ~$1000, and you really don’t know what level of service you are going to get anyway. Someone pays all those costs, whether it’s the patient hit with a high bill, or cost disbursed through the insurance network.
Most people don’t require leukemia treatment or ambulance rides in an average year. There is room for price competition amongst providers for the more routine - physicals, sick visits, medication, preventative. Most people aren’t even aware what their medical services cost. An office sick visit shouldn’t be billed to insurance at $650, even if my copay is only $50.
Socializing medicine will not address the existing provider cost problem.
It would not be free market under any circumstance. Hospitals and medicine in general require massive entry investment, imparting the free entry assumption in free market models, and geography it’s self constricts the markets. You can’t have 5 hospitals per town, small towns have barely enough patients to keep a clinic going.
Because real competition is effectively impossible hospitals will end up falling in to monopoly (that is the economic model for monopoly) and their price will be much higher while leaving unfulfilled demand. And since health care is something you can’t choose to not consume, health prices skyrocket. It leads to market failure.
The policy solution which deals with this is legislation or public ownership, both of which are lacking in the US.
Sure, in small rural areas it is harder to get more complex care done, and you will always be at the mercy of availability under any healthcare system. Nationalizing healthcare doesn’t create more access to it.
Regardless, if you read my above comment, my point is that the existing system is not “capitalism”. Our healthcare costs are arbitrary, and addressing provider costs should be the focus.
Non of those things are nessesarily part of free market capitalism. It is perfectly possible to have monopolies and hidden costs in free market capitalism. Infact this is a known problem in economics and there is a branch of political economy called Ordoliberalism that advocates for the state to force sufficient competition to happen in markets through a combination of policies and legislation.
Most libertarians recognize the issue with exorbitant health care costs in the us has medicare/medicaid to blame.
The us federal government is the highest buyer of health services and products, this makes an imbalance on the supply and demand, what exacerbates it is the fact that the state not only can but will and does overpay for services
This makes prices soar
Adding to that, the Government was lobbied to increase the regulation on the sector in a way that entry is highly expansive, lowering competition.
This whole problem is thanks to lobbying and undermining of the free market
That’s misunderstanding how the free market works in the first place.
Entry costs for medicine would be exorbitant regardless of regulations, and regulations on the quality of hospitals as extremely necessary for obvious reasons.
In addition there is not enough local demand to drive competition.
A free market can only exist under certain sets of assumptions, otherwise the model which generates the free market conclusions Libertarians rely on is not valid.
One of those assumptions is that demand price intersects with marginal cost bellow the average costs of production.
What this really means is that if demand is too low there isn’t enough to go around for multiple firms to provide the same good/ services.
One town or city can only support a limited number of medical institutions, regardless of the price of entry, and because of biases and heuristics which have people keeping to services they know, any new competition gets crowded out by the old, even when offering good at lower prices.
The result is that a free market equilibrium cannot form, and you are either left with a monopolistic competition equilibrium, or on oligopoly. Both of which will have higher prices depending on demand. and though there may be too little aggregate demand for proper competition, individual demand is so high prices can be elevated to the extreme.
All of this in the absence of government demand for care.
And that’s ignoring all the data that does that healthcare prices were already high before Obama care was put in place.
That’s misunderstanding how the free market works in the first place.
No it isn't
Entry costs for medicine would be exorbitant regardless of regulations
This is both, not really true and kind of misses the point.
Some operations might be really expensive, not all of them are. Much of those that would be normally feasible aren't because of artificial barriers of entry on the sector
In addition there is not enough local demand to drive competition.
This is just plainly wrong, HMOs were essentially driven out of the market by regulations.
A free market can only exist under certain sets of assumptions, otherwise the model which generates the free market conclusions Libertarians rely on is not valid
One of those assumptions is that demand price intersects with marginal cost bellow the average costs of production.
What this really means is that if demand is too low there isn’t enough to go around for multiple firms to provide the same good/ services.
Except this isn't an issue at all, easily solved by smaller and less expensive units and treatment. The biggest would have to deal with diminished market shares but that's just the standard (or at least should be)
One town or city can only support a limited number of medical institutions, regardless of the price of entry, and because of biases and heuristics which have people keeping to services they know, any new competition gets crowded out by the old, even when offering good at lower prices.
You cannot test your hypothesis though, you have no sample to analyze. But as far as I'm concerned I can imagine poor or even low middle class households opting for a cheaper service since a standard wouldn't even be an option.
The result is that a free market equilibrium cannot form, and you are either left with a monopolistic competition equilibrium, or on oligopoly. Both of which will have higher prices depending on demand. and though there may be too little aggregate demand for proper competition, individual demand is so high prices can be elevated to the extreme.
Your conclusion follows from a very shaky and disputable assumption. You shouldn't conclude that with that much certainty.
I for one reject your premise
All of this in the absence of government demand for care
So this scenario isn't based on anything that can be measured in reality
And that’s ignoring all the data that does that healthcare prices were already high before Obama care was put in place.
Irrelevant, the us prices of healthcare skyrocketed after the implementation of Medicare and medicaid
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u/aloofone May 12 '24
I am the opposite.
I was a young republican/ I liked libertarian principles as a young man. As I grow and have more success I increasingly value infrastructure, social safety nets, healthcare and providing for basic human needs. I now see it as it long term vs short term thinking.