A Dog-Eat-Dog Market

Health benefits not only an individual but society as a whole

In his recent letter, Rep. David Dunn asserts that a free-market system is the solution to health care. But his claim is based on the fatal misconception that free markets are the answer to our medical needs. The reality is that free markets are abysmally bad at delivering health care. That’s why every advanced economy, to one degree or other, has given government a large role in providing health care to its citizens.

The major reason a free-market system is not the solution is because the economic theory on which such a system operates breaks down when applied to health care, resulting in pervasive market failures that lead to inefficient and costly outcomes. Market outcomes tend to disproportionately favor the rich and are not consistent with improving population health. The end result is a less healthy population, higher per capita costs, and poor people.

Health benefits not only an individual but society as a whole. Healthier societies are wealthier because they take advantage of more of their human potential. Sicker societies underinvest in human capital because early death or chronic illness reduces the payoff from education. The dog-eat-dog market alone can’t and won’t make us healthier, or wealthier. We’re better off if we act together. The debate should be over what sort of role government should play in health care, not over whether government is necessary.

Edd Blackler