Free-Market Solutions to Healthcare Disparity Among States: Quality Care, Quick Service and Affordable Costs

This is an IJR Red reported opinion response to IJR’s original investigative piece, “State to State Disparities Leave People Fighting for Healthcare.” To see a proposed solution from the other side of the aisle, you can find the IJR Blue reported opinion response here.

The United States healthcare system is complex, to say the least. Not only do Americans witness policy battles in Washington D.C., but each state has the power to decide how to manage its own system — and some states do so better than others.

As IJR reported, states like Vermont require minimal out of pocket costs to see a physician, while programs in states like Louisiana can leave families with mountains of debt after treatment, if they can even access that treatment at all.

It’s important to confront these disparities, but it is also critical to consider every aspect of a proposed “fix,” because what works for Vermont may not be the solution for every state.

Ideal Healthcare

In a perfect world, a country’s healthcare would have three elements: quality care, quick service, and affordable costs. But this isn’t a perfect world. The reality is that the laws of supply and demand only allow a country to prioritize two.

This concept is referred to as the “Iron Triangle.” As Elmer Philip Lehman IV, MD, MPP writes in the Cleveland Clinic Journal of Medicine, “interventions in health care inherently require trade-offs, which prevent simultaneous improvement in all three components.”

Right now, the United States has prioritized quality care and quick service, making us home to 17 of the top 20 hospitals in the world and making our wait times far shorter than other countries, including Canada.

Because the United States has chosen those two priorities, the price of healthcare is much higher than it is in similar countries.

Other countries have chosen quality care and affordable costs. Canada’s socialized medicine ensures that citizens will not pay high fees for their service, but the wait times are some of the worst when compared to similar countries.

Calls for Change

In the United States, some on the left have called for Americans to shift their healthcare priorities to focus on the affordability aspect. Many Democrats, led by Sen. Bernie Sanders (I-Vt.), have made Medicare for All a top priority.

JULY 5: A small group of activists rally against the GOP health care plan outside of the Metropolitan Republican Club in New York City. (Photo by Drew Angerer/Getty Images)

This service would expand Medicare to every American, providing nationwide insurance, but greatly reducing the states’ rights related to healthcare.

The Problem with Socialized Medicine in America

The United States already has a form of socialized medicine under the Department of Veterans Affairs (VA). The VA provides free or reduced cost healthcare to those Americans who served in the military, but the program has been failing them.

Veterans faced months-long wait times, many of which were covered up by hospital administrators. Beyond the long wait times, veterans reported poorly staffed hospitals and dirty conditions. And it isn’t for lack of funding. In Las Vegas, Nevada, the VA put up a one billion dollar hospital and they still reported six-hour wait times — in the emergency room.

State Funding

As reported by IJR, there is a staunch disparity between healthcare service in states like Vermont and Louisiana, with the former having the best healthcare in the country according to WalletHub. That doesn’t mean, however, that the people of Vermont are not paying for their healthcare.

When comparing states’ healthcare rankings to the states’ tax burden rankings, there is a general pattern that the heavier tax burden falls on the states with the better healthcare. Vermont, for example, has a higher tax burden than Louisiana and Tennessee.

2018’s Tax burden by state according to WalletHub

Source: WalletHub

Best and worst states for healthcare according to WalletHub

Source: WalletHub

National Funding

There is no such thing as free healthcare. Medicare for All is projected to cost $32.6 trillion dollars over 10 years. The entire annual federal budget in the United States is less than $4 trillion.

To put it bluntly, the socialized medicine we have in the United States under the VA is a disaster, and to expand Medicare to everyone would bankrupt the country. And that doesn’t even include the moral risks that occur with socialized medicine (see Charlie Gard and Alfie Evans).

Free Market Solutions

Just because it may be impossible to perfect the healthcare to the point that every person receives prompt, affordable care, doesn’t mean there are not flaws to pound out of the current system. Conservatives point to two options for improving healthcare: fewer restrictions and more options.

Fewer Restrictions

There is a need for government regulations in the healthcare industry to maintain patient safety, but there are some regulations that are protecting insurance providers more than patients.

For example, Dr. Gajendra Singh wanted to be able to provide his patients in North Carolina with $500 MRI scans, less than half the cost of the average MRI scan in the state. However, he was not allowed to do that because the state required him to present a “certificate of need” to own an MRI machine, effectively eliminating competition for large hospitals with certificates.

Many states with high-cost healthcare, including Louisiana, enforce “certificate of need” laws. This regulation prevents competition from emerging to lower prices.

Sen. Rand Paul (R-Ky.) offered another deregulation solution, drafting legislation to expand access to Association Health Plans. These plans allow groups of people to pool their insurance to help counter expensive issues like pre-existing conditions.

JUNE 22: Sen. Rand Paul (R-KY) speaks to the media about the Senate Republican health care bill proposal. (Photo by Mark Wilson/Getty Images)

Some employers already use these, but most individuals or small employers are not allowed to join because of current policies. Stripping these regulations would allow consumers the ability to join together, giving them more buyer power and forcing the insurer to compete for their business.

More Options

Most conservative healthcare proposals can be boiled down to one thing: competition. Right now, there are many laws preventing the free market from reaching its full potential. For example, many states have near-monopoly control of their healthcare because there is not interstate insurance in the U.S.

In fact, one insurer in Louisiana controls two-thirds of the insurance marketplace, while the largest insurer for lower cost states like New Hampshire only controls 39 percent of the market. By allowing individuals and companies to buy insurance across state lines, those monopolies will lose their power and prices should fall.

Rights versus Privileges

Those on the left pushing for Medicare for All believe healthcare is a right, rather than a privilege. Some could argue that’s not true. Patients do not have a right to their doctor’s time, to a pharmacist’s research, or to a hospital’s equipment.

Drew Angerer/Getty Images

The medical industry is just that, an industry. As with any industry, the best way to ensure that prices fall is by cutting unnecessary government intervention, allowing the free market reach its full potential.

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