Free-market health care would save $2.3 trillion a year
The main reason Congress is having a difficult time with health care legislation is a failure to recognize the costs of our current health care system. These costs have become so great that a move to free market health care can save Americans $2.3 trillion a year. Data from the World Bank show the cost of health care in the U.S. can be three times what it is where a country relies on the free market.
My own experience with health care in Mexico confirms the World Bank data.
Six years ago, I had a firsthand opportunity to compare costs in Mexico’s private health care system to those in the U.S. At the time, I estimated health care costs in Mexico were approximately half the cost in this country. A more recent experience suggests the cost difference has increased substantially.
My wife, who has asthma, recently contracted the flu while in the U.S. For two days (a Friday and Saturday), her doctors refused to see her due to an influx of other patients seeking appointments. The office is closed on Sundays.
In spite of a difficult Sunday night, she insisted on keeping our scheduled flight to Los Cabos, Mexico, on the following Monday. That afternoon, we called a private sector Mexican doctor. He saw her immediately at the hospital. After several exams, an x-ray and blood tests, he said bronchitis had turned into the early stages of pneumonia.
After three hours of intravenous feeding with antiviral medicine and antibiotics, her condition stabilized. Before leaving, we received seven different medications to help her recover. The total cost for doctors, assistants, x-rays, intravenous feedings, blood tests, medicines and follow-up visits was $403. In the U.S., we would have felt fortunate to pay that amount for the x-rays alone.
The total amount was payable on demand with a credit card, as with all normal transactions in a free market system. Comparing health care costs elsewhere to those in this country is complicated by many factors. The most significant factor is the lack of a free market in the U.S. Without a market, it’s almost impossible to know the real cost of any item.
The current U.S. health care system resembles the old Soviet system. Government dominates the decisions of who gets health care coverage, when, where and at what price. This is a highly inefficient system, which has been made even more inefficient by the “Affordable Care Act.” The question is how much more?
Aside from my personal experiences, there are other indications we are paying three times the amount we could be paying for health care. This conclusion is supported by data compiled by the World Bank. It shows health care costs per capita in the U.S. are three times what they are in Singapore.
Singapore’s health care system utilizes many of the efficiencies of a free market system. Most routine health care expenses are paid by individuals out of their health saving accounts and prices are fully transparent. There also is significant government involvement to make sure everyone has access to high quality, inexpensive health care.
Current U.S. health care costs are upward of $3.5 trillion a year. The World Bank comparison suggests $2.3 trillion of this amount represents the waste due to our inefficient system.
Eliminating such waste through a free market system would lower the cost of health care so dramatically there would be more than enough resources to provide high-quality health care to all.
Robert Genetski is a Saugatuck-based economist who writes for the website classicalprinciples.com.