In a way, the Cornell professor is right. The health care system
does not operating according to the rules of economics. As Michael
Cannon and Michael Tanner of Cato point out in their new book, Healthy
Competition, most medical markets in the U.S. have been short-circuited
by government intervention and third-party payment for 86% of medical
costs that eliminate price as a consideration.
People can get
high-quality glasses, contacts, or LASIK surgery at reasonable prices
because of competition, but a broken arm can lead to a 6-hour emergency
room visit plus two additional trips to doctors during office hours and
nobody knows how much it really cost in the end.
The mistaken belief that there already is a market for health care is indeed a significant barrier to reform.
