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CounterPunch Exclusives

A Free Market Approach to Healthcare: Lower Costs and Better Outcomes

With many left-of-center types coming up with their plans for reforming healthcare, in the event the Democrats retake the White House in 2028, I thought I would once again throw out my free-market schemes. If nothing else, a little clear thinking should help the debate.

We all know healthcare is tremendously expensive. Part of this is because it costs a lot to pay the people, doctors, nurses, technicians, and others, to provide care for patients. However, a big part of the cost is the money we pay for things, specifically drugs, and medical equipment and devices.

What we pay for the services can only be reduced by paying people less. That would be okay with highly paid hospital administrators, and also doctors, who earn on average more than $360,000 a year. It would not be okay for most people lower down the pay ladder, many of whom struggle to get by already. We can and should look to limit profits, but they are only around 5% of what is spent on healthcare services. There is also the cost of insurance, but I’ll get back to that.

Government-Granted Patent Monopolies Are Not the Free Market 

But the big story that fans of free markets everywhere should be focused on is the money we pay for things like drugs and medical equipment. This year we’ll spend close to $750 billion on drugs and other pharmaceutical products. We’ll spend over $50 billion on various therapeutic devices used at home. Hospitals and other providers will spend over $130 billion on medical equipment.

This spending on goods comes to close to one-fifth of all healthcare spending, but it is an important fifth. Many of the items that require pre-authorization from insurers are costs associated with these items. This can mean starting on an expensive drug for treating a serious illness or getting a scan from the most modern MRI machine.

Insofar as drugs or scans are........

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