Op-Ed: Fixing Healthcare in a Free Market: Innovations in the Marketplace

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-- This article is part 3 of a 5-part series --

This is because governments do not have the same incentives as individuals to invest in new technologies or try new approaches to healthcare.

In countries that have Socialized medicine, for instance, we typically see fewer innovations in medical technology, leading to a decrease in the supply of these important medical tools. In these systems the healthcare budgets are usually very tight, and bureaucrats and politicians often see investing in new technology as too costly and risky.

Take the Socialized system in Canada as an example. A study by the Fraser Institute has found that among the countries that make up the Organization for Economic Cooperation and Development, Canada ranks fifth in terms of total amount of healthcare spending. Yet, at the same time, they rank 21st out of 28 in CT scanner availability, 19th out of 22 in lithotriptor availability, and 19th out of 27 in the availability of MRIs. This shortage in accessibility is a huge problem in Canada.

Take, for instance, the case of a hospital in Guelph, Ontario that has decided to admit animals for CT scans. They are motivated by profit, charging the pet’s owners $300 per visit for access to the machines. At the same time, people like Greg Moulton, who was suffering from excruciating headaches, were on a two-month waiting list to use the same machine. In Canada, however, it is illegal for an individual to pay out of his or her own pocket for medical expenses covered under the government-controlled plan -- that would be unfair after all -- so he had to wait. A dog, however, could use the same medical technology immediately.

This situation has essentially put the value of the life of a human being lower than that of a dog, or any other animal for that matter. The problem is that the doctors are forced, by law, to only provide an MRI at the scheduled times for the people on the waiting lists. A person cannot go in unscheduled to get the procedure done, but an animal can. This is an egregious violation of the basic human right to life, and it has been perpetrated by the government of Canada.

Not only does the free market allow for improvements in technologies, but it also breeds innovation in the way that healthcare is distributed. One example of this can been seen in the idea of “boutique” medicine that has been appearing in the United States. In this healthcare model, patients agree to pay primary-care physicians an annual fee. In return, these doctors agree to be available on a 24/7 basis, while limiting the number of patients they will have. The fee can also cover other expenses such as medication, diagnostic testing, and exams, along with the guaranteed easy access.

Another one of these innovations can be seen in the idea of SimpleCare, which is also becoming popular in the United States. In this program, patients agree to pay doctors in full on the spot. This drastically cuts out paperwork that would normally be needed to send to insurance companies, or government agencies in the case of Universal Healthcare. This reduction of paperwork allows the doctors to cut spending by not needing to hire as many secretaries or other individuals to handle the paperwork. This process has allowed the doctors to cut their prices by 30 to 50 percent. These organizations would likely be illegal if there were more government control in the healthcare market.

Innovations are already occurring in the United States where there is restricted free market in healthcare. In places like the United Kingdom and Canada, where there is more government control of the industry, many of these innovations are less likely to occur. In fact, in most countries with a typical national healthcare plan, many of these advancements would actually be illegal. It is important to note, however, that the United States is not a complete free market. Only when the market is allowed to operate without restrictions, such as those from the FDA and the ERISA law, will we see true innovation in healthcare.


Additional Information for this article obtained from the book Does the United States Need a National Health Insurance Policy? edited by Nancy Harris.