Jarrett Skorup has an excellent article on the false impression some in the health care reform debate have about the intentions of insurers versus the intention of bureaucrats.

While it’s true that insurers are primarily concerned with their bottom line, rather than acting benevolently, it’s not true that we should expect any more goodwill from a government bureaucrat.

In the view of Krugman and others who support statism, because they seek profits health insurers are bad. This makes him blind to the countless examples of how the pursuit of profit in a free and competitive marketplace provides better service than the alleged goodwill of government officials.

Of course, American health care is hardly a free and competitive market. The government controls 50 percent of health care spending in the United States (and rising), up from 10 percent in the 1960s. Medicare imposes price controls and only pays on a “fee for service” basis, destroying the incentives to innovate in ways that would generate real increases in value.

Moreover, tax policy that allows employers -  but not individuals — to deduct health care expenses has led to a third-party payer system that skews incentives for both consumers and providers, preventing the former from being good, frugal shoppers, and the latter from becoming more efficient and innovative. This government policy also makes insurers less responsive to consumers, which wouldn’t be the case if you could “fire” the insurance company rather than your employer.

As Adam Smith noted, “It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.”

The intentions of those providing the care are beside the point – the main objective of health care policy should be to ensure that Americans have timely access to quality medical care, not to try to police the motivation behind those providing it.

Share More …