Healthcare Has No Free Market

24 April 2004

”Why dont the same market forces that drive price competition for DVD players keep health costs from rising at double-digit rates? [Business Opportunities Weblog courtesy of Dane Carlson]

As the Business Week article mentioned, the ”virtuous cycle” really has provided great enhancements to our standard of living. However, regulated industries have never had the advantages that are ultimately uncovered in free markets. Healthcare is clearly a regulated industry.

The pharmaceuticals industry is among the most tightly regulated in the country. Government programs and employer-sponsored insurance programs clearly provide outside influences on the economics of healthcare.

What would you have for lunch if you had a $5 copay? Why is health insurance thought of as an employer’s responsibility to the labor force, but home owners and car owners don’t look to their employer to insure those purchases.

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