Look here. Told you so!

For those of you who are reading the Healthcare tabs on this web site, you will have read the claim that government price controls are driving up prices for medical goods and services. Here is a real world example from Twitter.

Basic Economics of Healthcare

Our home has two central air conditioning systems, one upstairs, the other down. The kids sleep upstairs. The upstairs unit was not working at all last night at 9 p.m. I put on my headlamp and went outside to see if a tree limb had fallen into the external unit. No. I went into the attic to check the inside unit. I opened the unit and a light was flashing: dot, dot, dash, dash, dash, dash. “24”. I performed an Internet search “Carrier Aprilaire error code 24”. I was informed that a low voltage fuse was blown. I looked at the circuit board and found the fuse.

I put batteries in my almost-never-used ohm meter to check the fuse and indeed it was blown.

Today I went to the auto parts store and bought five 3-amp automobile fuses, type E, for $4.31. I came home and installed a new fuse and the upstairs unit worked but the outside unit was still not working and shortly the fuse was blown again. The Internet search had informed that if this happens there is a short in the low voltage circuit. I went outside to examine the unit in daylight and saw a low voltage wire. I touch it and it fell from the unit, disconnected. I found the wires coming from the unit, a yellow/brown wire and a yellow/blue wire. The wires coming from the house were red and white. Another Internet search yielded this information: brown and red are positive lines; white and blue are negative lines. Using twist electrical connectors, I connected the wires and voila everything works!

So, what does this have to do with healthcare? Well, imagine if I had “air conditioner” insurance with emergency coverage or imagine if I had waited until Tuesday (the day after Labor Day) to call an air conditioning professional to do this work. Either I or the insurance carrier would have paid $200 for the professional to come in 72 hours rather than paying (as did actually happen) $4.31 to solve the problem myself in less than 24 hours.

[Please note that what follows is fictional imagining of what might happen if we lived in a free market for healthcare. I am not a licensed medical doctor and this writing is not intended as medical advice. See your own healthcare provider in case of a sore throat.]

Every parent and every grandparent is aware that children sometimes get a sore throat. We are aware that sometimes the child has strep throat. The doctor tells you and me that this is a serious condition that should be treated. Ordinary people can buy a home strep test kit for less than $2 per test strip to see if strep is present. (We are told that the kits are not perfectly reliable.)

Most parents have experienced the doctor prescribing amoxicillin (the pink stuff when the kids are really young) for this disease. Some pharmacies give this drug away for free.

As I said this writing is fiction and pharmacies can dispense amoxicillin only on prescription under present law, but if the pharmacist could dispense on the pharmacist’s judgment, we can see that that cost of treating strep throat would be less than $5.

Every reader of this blog knows that doctor treatment of strep throat will take perhaps days of time (the scheduling of the appointment takes time) and between $60 and $200 of charges paid either by the patient or by health insurance or by both (co-pays, deductibles, and coverage). Here is one doctor’s online discussion of this issue, including cost estimates.

Our healthcare system is a government monopoly with monopoly controls in every part of the system. Healthcare spending is expected to be 20% of the American economy in 2024, up from  17.4% in 2013. Among the reasons for this fiscal disaster is the fictional example given above: a treatment that could and should cost less than $5 actually costs between 12 and 20 times as much.

Government monopolies are bad! Duh!