Has “market failure” caused high healthcare prices?

posted by
December 13, 2016
Ludwig von Mises Institute
by Dale Steinreich  
Posted in Commentary

"With premiums rising an average of 22 percent and as high as 116 percent on Obamacare's 2017 government exchanges, it seems surreal to read journalists attributing the economic pathologies of US health care to market failure. Yet that is essentially the perspective being driven by the Associated Press and NBC with approving input from industry economists and consultants. While not a new narrative, the most recent version begins with the observation that patient co-payments and deductibles have failed to control costs. According to a Mercer consultant, 'It's not human nature to be rational thinkers about health care cost decisions. ... It will never be just like buying a lawnmower.' In popular and academic literature, this is a common assertion that is never explained in much detail, never mind rigorously proven. And hilariously, it's still regnant dogma even as American consumers, right before our very eyes, continue their abandonment/avoidance of Obamacare because of its increasing costs." (12/13/16)


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  • dL

    well, it’s a market that no one can afford w/o the subsidy. A exchange between sellers and buyer where they would be no buyers is not much of a market. Unless of course the sellers organize to force buyers to purchase under IRS threat, the sellers get the Feds to monopoly subsidize the price in exchange to take on insuring a pre-existing condition(which really wouldn’t qualify as health insurance).

    So you have a state-run market, a market where negotiation is not between buyer and seller but between a health-complex cartel and the state. Market failure in the state-run market? No..b/c the objective of the state-run market is to increase discretionary power. In that sense, ObamaCare has been a spectacular success.

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