The GOP thinks the solution to rising health care costs is a wintry blast of market forces. Just make consumers put more skin in the game, they say, and the problem would go away. It sounds reasonable in theory. Would it work in practice?
No. With high co-pays and deductibles, American consumers already have a huge amount of skin in the game. Medical professionals, like professionals in other fields, don’t compete on price. Pricing is totally opaque, anyway. Consumers are rarely in a position to evaluate what they really need, as they lack the requisite training and information and are in exigent circumstances at the time they should be bargaining. Local hospitals are effectively monopolies. The health care field, as a result, is just one market failure after another.
The bottom line here is that, once a country has decided that health care is a right rather than a privilege, extensive government involvement is inevitable. The only solution to market failures is even more government. We need to follow the example of virtually every other country in the world and create a consumer cartel to impose reasonable prices on providers. Prescription drugs would be a good place to start; authorizing the government to bargain would be of great benefit to consumers, and innovation in drug production can be encouraged through more targeted government subsidies, as in the case of the Covid vaccines.