Friday, June 23, 2017

"There's no such thing as one unit of healthcare."

Obamacare? Trumpcare? Get Rid of it All | Mises Wire: "From a fundamental economics point of view, what is healthcare exactly? One of the things that's particularly frustrating for me as an economist is this notion that "healthcare" is some kind of a unique good or service, that everybody needs, everybody wants, but cannot be provided by the market the way the market provides shoes, or tomatoes, or automobiles, or any other good. But what is healthcare? Nobody consumes "healthcare". No one has a right to "healthcare," because healthcare is not a homogeneous thing. There's no such thing as one unit of healthcare.

Rather what we mean by healthcare is a discreet set of specific commodities, goods and services, that you can buy in combinations, or different quality levels. So open heart surgery is a service you can purchase on the market that contributes to your health. But so is taking an aspirin. In other words, there's no such thing as "healthcare." There's a heterogenous bundle of goods and services that different individuals will want to consume at different levels. Now when we think about it this way, it becomes far from obvious that these particular kinds of goods and services cannot be supplied on the market just like other goods and services. If we would just allow the free market to work, if we could eliminate the third party payer system, the government subsidies on the expenditure side that drive prices up, there's no reason why a truly free market in healthcare goods and services couldn't be just as effective in the U.S. as the market for computers, software, automobiles, or the market for anything else."

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