This first-person, insider narrative is hugely informative. I would summarize the major lesson in a single formula: Insurance = socialized economics.
The basic insurance model consists of lots of people paying a little so that a few people can receive a lot. Over time the insurance provider becomes an indispensable middleman who — in the case of health care — stands between the service provider and the patient. Thus, whereas service delivery once was accomplished with only one contract between two parties, now it requires two contracts among three parties. This doubling of complexity drives out free market transactions, leading to price escalation.
It would be good to eliminate the middleman. As the essay shows, eliminating the middleman also can be feasible.
8 thoughts on “Why Aren’t There More Free Market Surgery Centers and Clinics?”
You know what else is a very simple, cost effective way to manage health care?
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OO!OO! Pick me, Mr. Kotter. Pick me!
First thing that occurred to me was ‘How did they get their certificate of need?’
Isn’t the COPN primarily a Virginia thing? I would not be surprised that it is in other states as well, but we have discussed the silliness of it in VA before.
COPN’s are administered by the States but were part of the failed Hillarycare package in the 90s. Federal funds were tied to States setting up COPN procedures.
Thanks for the history lesson.
Never did here of Hillarycare before. Maybe because it NEVER ACTUALLY existed. First lady’s may lead on certain things, but they do NOT pass legislation.
No, it did not pass in whole but the withholding of Federal funds from states that did not create COPN’s did not have to pass Congress.
“ The basic insurance model consists of lots of people paying a little so that a few people can receive a lot.”
That is insurance in general and has been for centuries. It is true with car, home, disability, shipping, etc. people get insurance to protect their assets in the case of losses.
If everyone ran up huge bills or losses, the premiums would be astronomical. But that is not the case.
Just like people wear life jackets when boating. Hopefully you never need it, but if you do, nothing is better for the cost.
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