Do insurance companies undermine the benefits that a free market should have in our healthcare system?

brainstorming for a research paper. any constructive input would be appreciated.





For capitalism to have any benifit in increasing efficiency, there has to be competition right? that way the consumer can pick the product (in this case lets say a certain medical procedure or piece of equipment) that gives them the best VALUE for their buck. this should, in theory, force competition. do i have this right so far?





with the current health care paradigm, for the most part, employer paid or government subsidized insurance companies ( HMOs, Medicare, etc) pay the bills of the consumers directly, and then pass along the expenses to ALL of their customers accordingly in the premium.





If people are not paying directly for a good or service, they are not likely to care about its actual value, right?





My premise is that with this type of payment system, capitalism cannot do with healthcare what it has done with every other industry, because people dont have to make wise decisions.





any solutions??

Do insurance companies undermine the benefits that a free market should have in our healthcare system?
I'd blame the lawyers before i would blame the insurance companies. Insurance companies rates are so high because people are always suing doctors and hospitals. These doctors have to pay A LOT of money for malpractice insurance. If there was some sort of tort reform within the health care industry, rates would come down a lot. Another problem is the regulation over insurance companies. If we were allowed to buy insurance over state lines we would see more competition leading to better rates.
Reply:Insurance is a valid part of capitalism. It's supposed to be a hedge against a potentially larger debt. Essentially, it's a financial instrument designed to be used within one sector of the market.





The problem is that neither the companies nor the participants see it that way. Many people view health care as a welfare right, even though they're not paying for it that way; and many companies see it as a retail commodity that can be managed like a hotel or a mail-order catalog company.
Reply:The insurance companies have driven the cost of many things up.





Healthcare should be 1/4 of what it cost us now. Lawsuits and underpaying insurance companies have caused the major portions of the rise!
Reply:No
Reply:Excellent point, the same is true in many industries today, also as executives rotate from corporation to corporation they become quite well acquainted with the counter parts in the competition, as we saw with Enron no real competition exists when they have chosen to fix prices in a way that all benefit, and profits are assured.


In health care it is an imperative to cut costs for insurance companies to increase profits, so to deny certain benefits or understate the seriousness of an injury in order to curtail benefits is always a factor. this helps increase profits for stock holders.
Reply:Your conclusion begs the question; you presume we have a free market in health care.





Tell me when I can put up a shingle - such as is allowed in Iceland, I think - call myself a 'Quack Doctor' and prescribe things for people? If you clearly admit you are not a doctor you don't need a license, at least that's what I understand.





The medical profession is a highly regulated industry, from doctors and other professionals using licensing to keep out the riff-raff and preventing those who have alternative theories from trying them (witness the fights the general MDs have with chiropractic), to the huge pharmaceutical industry and attempts to keep alternative therapies away from the public, to the rules keeping certain medical devices off the market because they would hurt some large company's profits.





You want to talk about a free market, consider the software business; anyone can get in, the barriers to entry are low, you don't need any special license or training, and you can charge whatever you think the market will bear.





Medical industry: requires specialized training and licensing which costs tens of thousands of dollars and years, plus if you don't go to the "right" school you might not get a license; some Americans who go to foreign medical schools are denied licensing by U.S. state boards; what a particular medical service costs depends on what part of the country you get it in. (A doctor in Louisiana is going to charge less than one in New York City but video games and software are priced the same everywhere in the country.)





I think people don't pay directly for the fire department, but I do believe they care about the value of the service.





Let's not forget that not all health care costs are absorbed by insurance. Medicare only pays 80% of the "usual and customary" rate for the service, and in some cases, after a certain amount has been paid by the customer. This means the customer is liable for the difference. Some private insurance has gaps and significant co-pays too.
Reply:capitalisun has always worked --if-if goverement hadent bought votes-using peoples health-medical saving plans--would have been in force by now-people would pick and chose for thereselves-and prices would be down-there have never been a workable goverment plan--anywhere in the world--that i have been able to find--