Wednesday, January 04, 2006

Free-Market Medicine

Laser eye surgery has the highest patient satisfaction ratings of any surgery, it has been performed more than 3 million times in the past decade, it is new, it is high-tech, it has gotten better over time and... laser eye surgery has fallen in price.  In 1998 the average price of laser eye surgery was about $2200 per eye.  Today the average price is $1350, that's a decline of 38 percent in nominal terms and slightly more than that after taking into account inflation.

Why the price decline in this market and not others?  Could it have something to do with the fact that laser eye surgery is not covered by insurance, not covered by Medicaid or Medicare, and not heavily regulated?  Laser eye surgery is one of the few health procedures sold in a free market with price advertising, competition and consumer driven purchases.

Costs in health care have not gone up because of new technology; they have gone up because no one pays for their own healthcare.  Until some mechanism is put in place to force consumers from rationing themselves this problem is only going to get worse.

I can understand why some would oppose 100% free-market care, it seems heartless to let people suffer in their illness because they can’t afford expensive care.  There are alternatives available, and government provided care isn’t one of them.

Vouchers for the poor seems to be the best option since it forces even the poor to ration their care.  I wouldn’t even be opposed to letting recipients of those vouchers cash them in for other services on a quarterly or semi-annual basis.  

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