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Anthony Gregory
The Libertarian Perspective #43
Mon, 13 Mar 2006


A Total Health Care Monopoly

When a single corporation maintains a 100% market share in its industry, most of us would consider it a monopoly, free of competition and thus detrimental to economic progress, innovation, and human needs.

In California, State Senator Sheila Kuehl proposes such a system. The Democratic lawmaker seeks to force all the state's health care sector under the authority of the state government. Doctors' fees and pharmaceutical prices would be set by the state. Health care would be rationed. Private insurance would be illegal. Kuehl's plan, SB840, also known as the California Health Insurance Reliability Act, would be financed by a new 12% payroll tax imposed on workers and their employers.

Proponents of socialized medicine believe that government-controlled health care will cut costs and make medicine more available. But if it would indeed run more smoothly and inexpensively, why is it necessary to forbid—by threat of fines and imprisonment—private insurance? Kuehl and her supporters might realize that the market would provide something that the state-rationed health care system won't. Why else seek to use the violence of the state to crush market competition?

When top executives collude in smoky rooms to set prices, to strong-arm their competitors, to ration their services in concert, it is considered monopolistic. If the government is among the corrupt players in that same smoky room, offering the force and color of law to the collaboration, it is considered "single-payer health care."

Indeed, government is the greatest monopoly of all, the protector of all others. It gives favored companies special benefits and punishes less politically connected firms. It uses regulation to stifle small businesses and innovation and entrenches economic power in the hands of the few.

The most prominent private interests don't go away—they are only further absorbed into the protectionist system. It was Ted Kennedy's HMO Act in 1973 that empowered HMOs, by forcing employers who offered health insurance to their workers to include HMOs as an option. It is the Food and Drug Administration that protects Big Pharma from competition by erecting formidable barriers to entry—a small company cannot afford the hundreds of millions of dollars in bureaucratic expenses to bring a new, potentially life-saving drug to the market. It is no surprise, then, that such regulatory bodies are typically headed by former and future CEOs of the industry that they are legally empowered to police.

The most recent example is President Bush's gargantuan Medicare prescription drug benefit—at once the largest expansion of the welfare state and one of the biggest giveaways to Big Business in recent decades.

A steady move toward corporate socialism has propelled the exorbitant rise of medical costs in America. The proposed solution, even more consolidation of money and power in the hands of the politically connected, cannot solve the problem.

Small businesses, doctors who wish only to help their fellow humans, patients, and alternative medicine practitioners will suffer. Countries with socialized medicine are learning all this the hard way: surgeries are doled out according to crude predictions of how much patients will pay in taxes before they die, patients must wait two years for a routine hip replacement, and desperate refugees flee to buy in foreign nations what is prohibited in their own country. The answer is to deregulate, desocialize, decorporatize health care, to allow consumers to make their own decisions, to strip away the privileged status that the health care establishment enjoys from discriminatory licensing laws and regulatory agencies.

Fifty years ago, America had the best health care system in the world, until the federal government moved in, pushing out the free, voluntary health clinics that had graced nearly every city and major town in the country. Today's politicians recognize the problem that they've created, and yet instead of walking away and allowing the market to achieve the same magic as it does in the other relatively unregulated industries—such as computers, electronics, grocery stores, and the various wonders of the modern economy—they propose more centralized regimentation. Only a free market can liberate the people to serve one another's needs, through the market and charity.

Monopoly is inefficient and inhumane, as liberals recognized throughout the 19th century as they battled against the Big Business–Big Government partnerships in railroads and industry. Nowadays, monopoly is considered the salvation of the common man. Just because ideas change doesn't mean economic laws do. Socialism and monopoly create inefficiency, rationing, shortages, and higher costs. We must reject the total monopoly in California's medicine that Kuehl wishes to impose upon us—for the sake of our health.