Dick Morris on competition in health care

In his best-selling book OUTRAGE, Dick Morris notes the benefits of free trade. Morris says the "sectors where costs have soared--such as health care and higher education--are ones where there is no foreign competition." (p.294)

Morris is correct that the lack of competition in health care is a key factor in higher prices. He does not mention that quality of health care services is also a casualty of the lack of competition.

The modern physician guild (like the attorney guild) is protectionism in its most restrictive and odious form. Through state legislation the medical guild restricts who can provide health services, ostensibly "to protect the public"--regardless of how the "public" feels about this paternalistic and self-serving position of the guild. The physician guild also has monopoly control of the prescription pad, increasing demand for guild services.

What to do? As described more fully in my book The Audacity of Truth: what Rudy and Barack won't tell you, the answer is allowing more market alternatives: far more than Rudy or the rest of the Republican fake-markters would allow.

Here are a couple quick thoughts:
1. allow insurance companies to contract with low cost and high quality providers--whether they are in state, out of state, or out of country. Costs for major surgery in a U.S. hospital can be 20 times higher than in other countries. For example, the Escorts Heart Institute in India, a for-profit organization, performs heart-valve replacement surgery for $10,000; the same surgery in the U.S. runs about $200,000. And Escorts, which performs about 15,000 heart surgeries a year, has a mortality rate about half that of major U.S. hospitals. Hip replacement and other costly, non-emergency surgeries can be performed out of the country--or better yet--by "local branches" of these foreign competitors.

2. pass legislation to allow insurance providers to provide policies allowing individuals to "opt out" of the tort system. In return for limiting their remedies to arbitration or caps on damages, insurance purchasers would get additional coverage or a lower price. Lawyers of course would hate this.

Increased competition and enhancing the right to contract for insurance are two significant steps to reign in health care costs and improve quality. For more information, see www.anarcorp.com