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How to fix American healthcare

The following is shamelessly copied from The Ultimate Pro-WalMart Article, by Paul Kirklin, at The Ludwig von Mises Institute. Google says I've accessed this article from search results five times since August 14th. :) Today makes the sixth.

We're dealing with insurance problems right now. Our employer-provided insurance doesn't want to pay claims they are obligated by agreement to pay. I'm spending way too much unproductive time researching what they've done and calling them back.

I know that the reason insurance companies can be like this is because of government intervention. YES, insurance companies seek profit, as do all people, including people who complain about "evil, greedy" insurance companies. The difference is that with government help, you can often make profit by exploiting people, but without the mighty sword of government, in a free market, the only way to make sustainable profits is to serve people. If all civil laws related to medical care were repealed, including all laws related to medical insurance, the behavior of insurance companies would improve more than one thousand fold. Of course, a completely different class of more honorable people might be attracted to the industry as the change occurred. :)

Here's the excerpt. Below this paragraph, nothing is my own words:

Healthcare Benefits

Wal-Mart improves access to healthcare by raising the real incomes of all the millions of people who are its customers or the customers of its competitors, whose prices are lower because of its powerful competition. This allows people to be able to afford healthcare more easily than they otherwise could.

In spite of this fact, another one of the Wal-Mart critics' favorite complaints is that Wal-Mart "reduces access to healthcare." The Wal-Mart critics believe this because Wal-Mart does not offer substantial healthcare benefits to all its employees. Employees who don't have substantial healthcare benefits are often unable to afford healthcare on their own, and thus they are left with little or no access to healthcare. Wal-Mart is blamed for their plight since the company is allegedly capable of offering more healthcare benefits but chooses not to. In part the critics are right; access to healthcare is becoming more problematic, but this is not caused by Wal-Mart or by "corporate greed." It is the result of an irrational healthcare system that causes us all to suffer, including Wal-Mart.
"Wal-Mart has made the system ingenious so its employees don't have to be."

This is not an article on the problems in our healthcare system. So I can only deal with that subject very briefly here. Many people are under the false impression that employers are responsible for the healthcare costs of their employees. The reason that so many people have this misconception is due to government intervention. For several decades, the government has put pressures — mainly powerful tax incentives — on companies to offer healthcare as a fringe-benefit. It has artificially created a system in which it is cheaper for an employer to purchase healthcare for an employee than for that employee to buy healthcare for himself with take-home wages. This has caused healthcare fringe-benefits to become so widespread for so long that most people have forgotten that they are fringe-benefits (i.e., an alternate way to pay wages.) Instead, many people incorrectly believe that healthcare benefits for employees are a moral duty of employers in addition to wages. But healthcare costs are not the responsibility of employers any more than the costs of food or clothing or anything else are.

The disastrous byproduct of healthcare fringe-benefits being offered on such a widespread basis is that healthcare costs have become collectivized. Employers cannot directly pay unlimited amounts for all the healthcare any employee would ever desire, so instead they routinely contribute amounts into employee health "insurance" policies. Employees spend money for healthcare out of giant pools of these contributions. If employees bought healthcare with take-home wages, they would have no reason to collectivize all their healthcare costs in health insurance policies. Many employees would get health insurance for catastrophic events, but not for routine health expenses.

Unfortunately, collectivization turns economic progress on its head. Healthcare is a product of human labor. Just as we can improve our ability to produce all other products through increases in productivity, we can improve our ability to produce healthcare. The same market mechanisms that caused television sets to become increasingly better and more affordable can cause all healthcare to become increasingly better and more affordable. But instead of becoming more and more inexpensive as time goes by, healthcare in our country is becoming more and more expensive, a typical result of collectivization. Since money for healthcare is spent out of giant pools of contributions, for the most part, people don't feel any direct financial effects from their healthcare expenditures. Therefore, an individual has little reason to show any restraint in his healthcare spending, and few people do when they know "insurance is paying for it." Furthermore, there is no limiting force on prices of healthcare. Healthcare providers want prices going up higher and higher without limit, and healthcare buyers who don't feel the direct financial effects of buying healthcare have no reason to exert pressure on providers to keep prices down. Mainly for these reasons, healthcare costs are sharply rising.
"Many people are under the false impression that employers are responsible for the healthcare costs of their employees."

The fundamental problem with access to healthcare in this country has nothing to do with employers who may or may not choose to offer healthcare fringe-benefits in the face of sharply rising healthcare costs. The fundamental problem is: healthcare costs are sharply rising.

As healthcare costs rise, it will become increasingly difficult for companies and individuals to afford, and paying for it will become more of a drag on the rest of the economic system. The sensible solution is not to pressure companies like Wal-Mart to attempt to clean up the government's mess by dumping more and more money into the bottomless pit of healthcare collectivization as it gets more expensive. The sensible solution is to eliminate healthcare collectivization altogether, the cause of sharply rising healthcare costs. We must get the government out of healthcare, and we must expose as false the idea that employers have a moral duty to provide for their employees' healthcare costs. In the absence of government pressure, healthcare collectivization would end. Healthcare fringe-benefits would be dramatically reduced, take-home wages would increase, health insurance would be used primarily for catastrophic events, and most people would buy healthcare with take-home wages just as they buy almost everything else with take-home wages. Most importantly, the healthcare industry would get back on a path of economic progress, and healthcare would become increasingly better and more affordable for everyone as time went by.

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