The Free Market Isn’t Working Because the Market Isn’t Free

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The Free Market Isn’t Working Because the Market Isn’t Free

Photo: environmentalstudiesblog.wordpress.com

Photo: environmentalstudiesblog.wordpress.com

Photo: environmentalstudiesblog.wordpress.com

Photo: environmentalstudiesblog.wordpress.com

Nikhil Chandravel, Staff Writer

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Life hack: when forced to choose between building a bridge and not building a bridge, the most wrong answer is a compromise to build half-a-bridge.

And yet, that’s what Republicans and Democrats have ended up settling on. With appeals for Medicare for All to the left and the vicious reaction to socialism on the right, the two parties are stuck in neutral, with little progress being made on either front. What we seem set to receive from Washington is a hodgepodge array of half hearted bipartisan reforms and legislation that do some some good here, some bad there, and miss the point entirely elsewhere. This unholy truce achieved by the two parties has not arisen from good will and statesmanship but from gridlock resulting in only a few scattered compromises.

But compromises aren’t always good.

The goal of any compromise should not be focused on health insurance costs, or it will be half-a-bridge to nowhere. The best way forward as I see it, policywise, is to systematically focus on lowering healthcare not health insurance costs. Attempting to mend the industry by targeting insurance, as the Affordable Care Act or its Republican counter-proposals sought to do, is scarcely more productive than attempting to cure the bubonic plague by targeting malaise. At its most basic level, healthcare is expensive, therefore health insurance is expensive, so healthcare must be focused on.

So if the problem is healthcare, what can be done to lower healthcare costs?

Although there have been efforts to reduce the cost of prescription drugs and other treatments, so far, these plans have not been coordinated and focused. We need a broad regime of legislation aimed at weaponizing the forces of the free market for the consumer.

Democrats think that the free market has failed Americans and Republicans give lip service to it while not actually dealing with the obstacles we face in our healthcare market. The truth is that the free market has not failed but has not been allowed to be free.

There are four general principles I see that could guide any healthcare reform proposal that realistically accounts for a free market:  businesses want profits, consumers want cheap, quality goods, both suppliers and consumers need to have access to information about prices, quality, supply, and demand in the market, and there has to be access to the market.

The first general principle is abundantly clear and needs no further exposition. The second is also abundantly clear but since the Jabberwock is forcing me to make my articles more school-related, let me include a very-prescient student opinion here. I posited a hypothetical situation to Madoc Kimball (12), who conveniently happened to be active on Messenger as I was writing this article. When asked if he would rather pay for a band aid that cost ten cents or for a band aid that cost one cent if he had a cut, he said, “I would choose the 1 cent bandaid ofc, but I can’t help as feel as tho this is a trick question”. Then I asked if he would still prefer the cheaper band aid if it was one I had previously applied on my thumb (I was cleaning a pair of scissors). He said, “Lol I’d spend 10c on a bandaid”. This, extrapolated to the general population, shows that consumers in general want some balance low costs and good quality, and of course, if businesses provide this, they make more profits.

So why isn’t that happening? I would argue that it is because the third and fourth principles, access to information and access to the market itself, aren’t being adhered to, allowing, nay, encouraging companies to gouge consumers.

In particular, a lack of access to the market is incredibly lacking in the healthcare market. Patients face byzantine procedures and paperwork, go through multiple third-parties including their insurance provider, employer, and government, and often only realize the full extent of their bills after the fact. In addition, patients can rarely effectively compare prices because of the added complication of individualized insurance plans, the use of secretive chargemasters, and the unforeseen costs involved with treatment.

To fix this, we ought to copy Amazon. One of the online database’s major advantages is the ease of price comparison that ensures that consumers get the best available prices and quality. Currently, there is no broad institution that facilitates this effective, free flow of information in the healthcare market. The current platform for price comparison and transparency is a ragtag group of insurance provider databases only accessible to their own clients, non-comprehensive independent websites, and a few state laws in places like California and Massachusetts. However, this system is not standardized, methodologies vary, estimates are often not helpful because their price-ranges can be incredibly broad, and not all procedures are included, nor are drugs often covered by these databases.

A good solution would be to create a federal database that aims to cover every price, based on the actual bills of previous patients for every procedure or drug at every healthcare provider with every insurance plan. Institutions would also have to break down previous bills based on copays, deductibles, which insurance provider was involved, the age range and gender of patients, and rough estimates of “severity” (at the end of the fiscal year to minimize privacy concerns to individual patients). All that a patient would have to do is look up a procedure and find all the prices for it in their area, or the lowest prices in the nation for procedures and drugs, review healthcare providers, and browse insurance options based on prices for various procedures.

This in no way would be completely comprehensive given the massive scope of the healthcare industry, but if we want to give the free market a chance, the free flow of information is required. Shining a little light into the obscure world of big Pharma would pressure pharmaceutical companies, hospitals, and insurance companies and would go a long way in lowering healthcare costs for the average American consumer.

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