Increasing health care cost has been the subject of public discourse for years. Costs have a major effect on the health care system. Higher costs lead to lower accessibility of health care services. Higher costs also lead to lower coverage of health care insurance. Also, with higher costs, higher quality of health care is not guaranteed. Thus, critics and analysts are focusing their attention on major reforms that address quality and cost concerns in the health care system. One of these possible major reforms is free market health care. At present, there are ongoing debates on the implementation of free market health care.
This article defines and describes free market health care, and how it relates to issues in quality, cost, and efficiency in the health care system.
What is Free Market Health Care?
Free market health care is a system where there is minimal or no government regulation. In this minimal regulation, health care providers are free to provide services without needing to satisfy strict regulatory standards and requirements. As a result, health care providers do not need to comply with restrictive government licensing.
Free market health care has significant benefits. These benefits address some of the issues present in the health care system today. However, free-market healthcare does not ensure quality of health care.
Quality in Free Market Health Care
Free market health care can potentially improve the quality of health care services. Advocates argue that health care providers would be compelled to improve their services to remain competitive. Such a situation can be achieved as the health care system becomes privatized and adopts better business models.
However, in free market health care, the adoption of current business models would likely lead to the downsizing of health care organizations. Critics also argue that these business models typically involve cost-cutting policies. Even though health care providers would be competing against each other, the downsizing and cost cutting could lead to lower quality of health care.
Costs in Free Market Health Care
In free market health care, costs could be reduced. Advocates say that lower costs would be linked to competition among providers. However, critics point out that actual demand for health care is inelastic. Health care services would be needed even if prices remain high. Demand for health care services would continue to increase over time as the population grows, even when health care costs remain high. The cost of health care would still remain high because demand would remain high. Thus, it would be imperative for the government to impose regulation of cost of health care, and ensure quality of services.
Efficiency in Free Market Health Care
Advocates argue that the implementation of free market health care can potentially lead to an improvement in the efficiency of the health care system. However, efficiency could decline in the free market system because health care providers would still benefit from high inelastic demand even when healthcare efficiency and quality remain low.
Free market health care debate considers the factors of supply and demand, and cost and quality of health care services. A single payer system could be better because it can ensure better coverage for all people. This coverage is possible because of governmental control of funds. Even though free market health care has significant potential benefits, it does not guarantee cost-effectiveness and quality of health care. Thus, solutions like the single-payer system are potentially better options.
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