Andy, good points. I agree completely.

Topiary Cow, interesting points, but perhaps more relevant to the past than today. From what I’ve heard anecdotally, average doctor earnings have been falling over the past decade or so.

We already have the private sector, private hospitals and private physicians, competing. The problems is control of number of medical schools and graduates by the AMA which reduces supply while assuring those graduates a salary unseen in any other country because of shortages only marginally addressed by the influx of foreign medical graduates.

I disagree. The higher-ranking bureaucrats should have provided a separate and parallel set of circumstances under which such initiative is accepted, and retained the set that precluded it. Changing the rules isn’t fair, nor is it appropriately bureaucratic. Adding new rules is both.

The main point of the article is that we currently have a situation where there is a government-created oligopoly of providers, through centralized planning and approval of health care facilities, and an oligopsony of payers (health insurance companies, employer groups, and government health benefit programs) that have carved out special deals for members of their groups, without concern for the economic impacts of these special deals on the providers or those members of the public that do not belong to groups that benefit from “negotiated” (I call it take-it-or-leave-it) pricing. The result is a great exaggeration in the price differential between those who benefit from deals and those who do not.

One obvious alternative to the status quo is to simply mandate pricing levels across the board, which probably would not be upheld by the courts, and if nothing is done to affect the ever-increasing costs shouldered by providers due to unfunded government mandates, malpractice insurance, and the general effects of an inflationary environment, the attrition rate of health care providers will accelerate just when we need more of them to serve an aging population.

Another alternative suggested by some is to mandate 100% participation in some form of group health plan. Certainly this will help level the playing field on the consumer side, but without addressing the actual costs shouldered by providers, this will not be sustainable.

Unless the public is willing to suffer a huge drop in the quality and quantity of service that it has enjoyed to date, something will need to be done to address the costs imposed on providers, and controls that have created an oligopoly of suppliers will need to be gradually loosened to allow the private sector to offer competitive services. I’m not suggesting free-for-all anarchy, but there needs to be change, and the private sector is the historically successful incubator of innovative ways to deliver goods and services to the public. I don’t think that anyone in the US seriously wants us to follow the model of Canada or the UK.

I’ve discussed this topic in further depth in the full article, where I invite your readers comments.