Thursday, August 13, 2009

Free Market Food Markets

Don't miss a pair of fabulous WSJ editorials with suggestions for real, honest reform of U.S. healthcare. In the "The Whole foods Alternative to ObamaCare", John Mackey, CEO and co-founder of Whole Foods, presents excellent free-market solutions which are practical, fiscally responsible, grounded on the principles of individual rights, and compassionate. I have excerpted the highlights below, but the entire article is well worth reading.

Safeway also has an innovative free-market approach to decreasing their health care costs. In "How Safeway Is Cutting Health-Care Costs", Steven Burd, CEO of Safeway Inc., outlines his company's real life experience in controlling health care costs through a system of incentives that rewards healthy behavior, thus allowing employees to financially benefit from smart and voluntary life-style and medical choices.

I don't think it is an accident that these food providers are defending free-market solutions for the provision of health care. Food, shelter and medical care are all important, essential values--but none of them are a "right." The market provides us with an abundance of food in a wide variety of quality and price, and does so without massive government subsidy, regulation and control. The same bountiful results could be obtained if we reverted to a free market in medical care and in health insurance.

The Whole Foods Alternative to ObamaCare:
Eight things we can do to improve health care without adding to the deficit.

"The problem with socialism is that eventually you run out
of other people's money."

—Margaret Thatcher

• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs)...

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits...

• Repeal all state laws which prevent insurance companies from competing across state lines...

• Repeal government mandates regarding what insurance companies must cover...

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year...

• Make costs transparent so that consumers understand what health-care treatments cost...

• Enact Medicare reform...

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid or the State Children's Health Insurance Program...

Many promoters of health-care reform believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?

Health care is a service that we all need, but just like food and shelter it is best provided through voluntary and mutually beneficial market exchanges. A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter. That's because there isn't any. This "right" has never existed in America



Anonymous said...

Wow, I can't find fault with anything here. A few comments and questions, though. How do HSA's help those who are barely putting food on the tabel, or those whose sole proprietorships can't currently afford insurance?

Equalize tax laws...that means that in as far as health insurance benefits are a disguised form of wages (as are pensions and 401(k)'s), they should be taxed.

Repeal state laws... no problem, except that that measure might run afoul of state's rights advocates. Does the Federal government have the Constitutional right to mandate that States engage in certain forms of commerce, or is the Commerce Clause limited to regulating mutually agreed upon commerce?

Repeal government mandates... That's fine, but I would also like to see stricter enforcement of the contracts, so patients can't be dropped when they get sick.

Tort reform is a thorny issue. any tort needs to provide relief to the injured and must provide a deterrent to the perpetrator. This sometimes results in seemingly inordinate awards to plaintiffs that are in reality necessary to ensure cessation of the injurious behavior of the defendants. Maybe a review board to establish merit and penalty to lawyers who bring too many unmeritorious suits.

Transparency it much needed...

Isn't medicare "socialized medicine"?

How hard is it really to enter a tax deductible donation on your taxes? I may be missing something here, but I would submit that if you are having difficulty entering it, you are probably talking about serious money and you have someone else do your taxes anyway.


Beth said...

1. On those who can't afford and HSA:
There is so much distortion of the health care market that the portion of individuals and families priced out of it is far larger than is need be. Instituting the changes Mackey recommends would go a long way towards making health insurance and medical care affordable for a sig. number of those individuals. How to help those in need during the transition and what to do about the ultimate residual (I don't think we will ever be without some number of really poor) are different issues than answering the question of which type of system will maximize the number who are able to provide for themselves--state controlled central planning or the free market.

2. Equal tax laws:
As much as I am not a fan of taxes, not taxing health insurance or medical care to the same extent as wages or other goods and services introduces harmful distortions in spending. The increased spending it encourages increases demand, which is one of the contributing factors to the rising prices we have experienced. So yes, as long as we have income taxes, health insurance as a benefit of employment should be taxed the same as wages.

3. Repeal state laws...
I agree this gets tricky. I am not a scholar in constitutional law. At the very least, the case needs to be made that a free market across state borders would have the effect of increasing competition, deceasing the cost of insurance and increasing consumer choice.

4. Enforcement of contracts:
Yes!! If people are being dropped by their insurance plans in breach of contract, that is fraud an needs to be treated as such.

5. Tort reform.
Another legal issue beyond my expertise, but is a contributing area of rising costs and needs to be looked into.

6. Medicare is socialized medicine. The existence of this government program has essentially destroyed the market for health insurance for those over the age of 65. The only way you can "opt out" is to also loose your Social Security payments. So, an individual who has been legally required to pay into these programs their entire working life, can choose to forgo collecting the "benefits" they were forced to pay for--but they can not regain those funds in order to make alternative purchases.
And yet, more than one generation has now premised their retirement plans upon the expectation of receiving Social Security and Medicare. Any plan to dismantle these programs must be incremental and allow people adequate time to arrange for their replacement.

7. Tax deductible donation

My guess is that Mackey is thinking of a line item on income tax forms where you can enter a donation similar to the one asking if you want to contribute to the election campaign fund.