1 thought on “The scourge of Obamacare”

  1. Posted 02/06/2013 at 19:56 | Permalink

    This is a big way of saying very little, surely?

    Most people will accept that there are limits to how free a health market can be. Costs are complicated, consumers generally know virtually nothing about substitute products and quality is luck of the draw. In these circumstances, it’s not surprising that people opt for insurance models.

    The issue then becomes about the number of insurers and their relation with providers. Is it better to allow tie-ups between insurers and hospital groups, or not? Given that insurers are the only ones who will really have the ability to call out when hospitals over-provide care, preventing tie-ups seems a better way of policing rent seekers. Similarly, the insurance market must be open enough for new entrants and avoiding exclusivity deals etc. is one way of doing this. Given that profit margins have trebled from 5-15% over the last decade or two, it seems that some fresh competition here wouldn’t go a miss.

    As for Medicaid – when the state is being taken for a ride, one answer might be for it to duck out of the market entirely and provide the care itself. Given the massive profits of the health industry in the USA, they may find that even an inefficient public provider can out-compete the market, but given that this isn’t going to happen, I’ll remain happily in the UK and hope that the England’s NHS reforms aren’t the utter disaster I expect them to be.

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