“Capitalism is turning luxuries into necessities.” — Andrew Carnegie
Watching the shouting matches occurring at the town hall meetings across America, do you ever wonder why nobody holds town hall meetings or writes complaining letters to Congress about food and housing?
After all, food and housing are even more important than medical help. Most Americans don’t need to go to the doctor every day, but you do need to eat every day and live under a roof.
But medical care has become a political football because government is in over its eyeballs in controlling medical care in this country, while the free market reigns for the most part in food and housing.
Today the federal and state governments fund over half of the total health care expenditures in this country, compared to less than a quarter in 1960.
Today only $1 out of every $10 spent on health care is paid for by individuals out of their own pocket. In 1960, half of total health care spending was out of pocket. (See Dr. Arthur Laffer’s latest report)
The fact that somebody else is paying more and more of your health care costs is why the price of health care is skyrocketing. People are starting to complain: “It’s not fair that good health care costs so much.”
The good news in this debate is that there is a solution to skyrocketing health care costs. As I demonstrate in my textbook, “Economic Logic,” time and time again, free-market capitalism has solved the cost problem when the market is freed. Capitalism is all about making goods and services cheaper and better. That’s the American way — cheaper and better.
New medical breakthroughs, drugs, and operations cost a lot of money initially, but over time, the market works its own wonder drug — by constantly pushing costs down while increasing quality. It has happened in electronics, transportation, hotels, food, housing, and entertainment, and it can and has happened in medical care.
Note that in elective cosmetic surgery, eye glasses, and laser eye surgery. All have improved over time and have seen their costs go down. Price has declined and quality has increased.
The reason health care costs are going up so much and quality is declining is because the market is not allowed to operate. Someone is footing the bill, either businesses, insurance companies, or the government. And there’s the rub.
We have a great health care plan already in place, health savings accounts (HSAs). We simply need to expand it and remove all legal and tax obstacles which slow high deductible health insurance plans and Health Savings Accounts. As John Mackey, CEO of Whole Foods Market, wrote yesterday in an op-ed piece in the Wall Street Journal, Health Savings Accounts are the solution that could solve the entire health care problem. Read his editorial here
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