Chair of health care committee derides competition and chioce, but…

by Rob Roper

Rep. Mark Larson (D-Burlington)

Speaking at a Democrat sponsored forum on Health Care, Rep. Mark Larson (D-Burlington) responded to a constituent’s question about why, given failure after failure of government to lower health care costs, wouldn’t we try a more non-government oriented approach to solving our problems. Larson said, “For essential health care choices, there is no evidence that competition and choice bring down overall system and health care costs.”

This is almost as jaw-dropping as Larson’s statement (which he has never recanted to my knowledge despite several opportunities) to another group in Shelburne a few weeks earlier that implementing Green Mountain Care would save Vermonters $1 TRILLION over the next ten years. (At current spending levels, it would take Vermonters 180 years to spend a trillion dollars on health care, let alone save that much.)

In fact, a 2007 study of Vermont’s and other states attempts at health care/insurance reform done by Millman illustrates the impact of removing competition and choice from the marketplace. Before Vermont decided to mandate guaranteed issue and community rating in 1992 there were thirty-three health insurance providers competing in Vermont, and one could find indemnity insurance with deductibles as low as $50.

Since 1992, the amount of government meddling in the health care market steadily increased, and the number of insurers steadily whittled down to three. According to the Millman study, by 1998 the lowest indemnity deductible was $1000, and by 2006 that number had skyrocketed to $3500.

A December 2006 study commissioned by the Insurance Department concluded that as a result of government intervention,

“the individual market seems to be performing badly: the number of people buying such coverage is falling drastically; coverage is unaffordable for many; and the only coverage that is available has very high cost sharing.” The Insurance Department figures confirm that enrollment in the individual market is shrinking, while average premium levels are increasing.

On the other hand, areas of health care in which competition and market forces are allowed to dominate, costs are going down and quality is improving. A 2008 study by the National Center for Policy Analysis concluded,

… in health care markets where patients pay directly for all or most of their care, providers almost always compete on the basis of price and quality…. It is primarily in these direct-pay markets that entrepreneurs are creating many innovative services to solve the very problems about which critics of the health care system complain.

One notable example of this is Lasik eye surgery. An ABC 20/20 story about the National Center for Policy Analysis report said:

“In every other field of medicine, the price is going up faster than consumer prices in general…[But] the price of Lasik surgery, on average, has gone down by 30 percent.” Prices dropped even though doctors pay for advertising. And while the procedure got cheaper, it also got better. “When the lasers first came out, all they could treat was nearsightedness,” Bonanni said. “[Today] the lasers are faster, more precise.” We see better quality, and lower prices in medical fields where most people pay for care themselves.

There are other examples of this phenomenon as well. If Larson and other single payer proponents don’t see evidence of competition lowering costs and improving care (and, conversely, evidence of government intervention as driving up costs and harming care), it’s only because they only see what they want to see. And we all get the check.

 

One thought on “Chair of health care committee derides competition and chioce, but…

  1. Rob: an excellent article. Over the last two centuries, we have gone from stone age medicine to medical care beyond our ancestor’s wildest imaginations, because of the wealth generated by capitalism which gave scientists engineers and entrepreneurs time, funds and technology to do research and make medical devices that have resulted in an explosion of health. It is incomprehensible to me that these supposedly intelligent people do not understand that.

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