Driving through any typical American town, one is struck by the new and modern building likely owned and occupied by a medical provider. Reading the help wanted ad of any local newspaper, the most sought after jobs are in healthcare. Doctors drive and live in the best car and house in town.
What gives? The healthcare is obviously an economic success yet cited as the source of most of the country’s economic woes.
Let us examine the product: health and mortality. It is a must-have service and everyone will need it in one’s lifetime and price for the service becomes inconsequential because the alternative is likely fatal.
Let us examine the providers: doctors, hospitals and many other health professionals and vendors. These are exclusive, for members only cartels who confer certificates and licenses amongst themselves and their proclaimed professionalism allow them to charge any price for their services.
When there is unlimited demand for a product or service and the supply is limited to a few, the price and cost is through the roof. Healthcare costs are never disclosed to the patients and medical providers compete not on price but on how best they can entice patients to their facilities with glitz and propaganda. Patients never find out the true cost of their care, only that their life was saved or their health restored.
The economic paradigm of free market can control costs with free competition and the proverbial “invisible hand” where consumers shop for the best price. But this does not apply to the healthcare industry because the paradigm requires open transparency as to the product and price and there must be open and easy entry by other alternative providers. This does not exist in healthcare.
In business, become efficient or become extinct. But in the healthcare cartel, efficiency means pricing control with less doctor visits, less consultations, less diagnostic tests, less hospitalizations, and less of many other services that generate huge revenue.
There is no synergy of purpose so same medical tests are conducted by various providers for the same conditions. The medical cartel also establishes narrow specializations causing multiple consultations to come up with the same diagnoses and procedures. Hospitalization is readily prescribed yet statistics show that a third of hospitalized patients are harmed during their stay and too often are re-hospitalized within 30 days of discharged.
Patients have no clear choices. It is easily predictable that when one is referred to a surgeon for consultation, the recommendation is for surgery, not for other alternatives. Efficiency is just not the priority but to maximize billable services.
The healthcare business model fails the economic acid test. Competition and efficiency suppressed and an economic cartel created. The solution is simple: BREAK THE CARTEL and restore true economic demand and supply controls.