Market Regulation Kills Choice, Competition, and Health

by Micah J. Fleck

Back in June, TLR‘s own Brett Linley reported on a crisis in the avocado market regarding the supply and demand aspects of its rising popularity, and how government regulations were allowing crime to rise in the absence of real competition and abundance for the vegetable. To read tat article in full (which is very interesting), click HERE.

Now, a new list of health benefits of avocado has been released, making it all the more obvious that this food item will only continue to rise in demand as its health benefits continue to become more known and popularized. This means that not only is the commodity itself becoming more scarce and crime-ridden due to crippling government regulations, but the health and quality of life one could benefit from by accessing it is also limited.

This doesn’t just happen in the market we think of when the words “free market” come into play; it also occurs in the market we have long taken for granted and long assume as being innately non-market-esque: healthcare.

Last year, I wrote a rebuttal to an article by Greta Christina claiming that libertarianism isn’t a real thing because reasons. I shot down her reasons one-by-one, but paid particularly close attention to her issue with what she feared would be a type of runaway healthcare were it to be deregulated. In that article, I made the following argument, citing the following regulations as prime causes for the current atrocious state of the healthcare industry and how it translates to less choice and higher prices for the everyday consumer:

There is something known as “Certificate-Of-Need” (CON) Regulation. It’s a government program that blocks competition between lucrative hospitals and other alternatives (home health care, smaller operations that have no friends in D.C., etc.) and allows the former party to monopolize the industry. Basically, its function was to allow the big greedy hospitals the autonomy to deem for themselves whether or not any competing entities were really “needed” in the surrounding district. In other words, if one hospital were already exchanging money and deals with its buddies in congress, then the reward would be the ability to legally obliterate any newcomers who could potentially steal away business (and profits).

Let me ask you in business terms: when you become the only game in town and you have successfully built a monopoly for yourself in any given market (always with govt’s help, btw), do you still care about competitive prices? Or, with no competition left, do you then factor in all conceivable costs of your operation, apply them to the prices of your goods, and then throw it all on the customer? Of course you do the latter. That’s why monopolies are evil things. Yet the very same government that is already helping the medical field turn into a greed-powered industry is now going to suddenly make things better by regulating even more?

Insurance companies certainly do take advantage of this crisis of rising cost (much like college tuition, needless government incentives have caused the cost to rise exponentially faster than inflation), but they are merely trying to do good business, and they are not the source of this problem. They are a red herring for Washington to point to because Washington doesn’t want to point to itself. And it’s more than just the CON regulation that has f*cked up medical costs in the U.S. – there are regulations that keep competition from happening within the medical insurance world, as well. For instance, Americans can’t have their pick of any insurance company – it has to be an insurance company that originated in their current state of residence. If you move between states and had great insurance rates before, you are forced to switch to the “best” insurance company of your new state, which could be significantly more expensive. Also, certain states impose weird mandates on their own insurance companies which then affect their costs needlessly.

Allow me to unpack this: I made this argument to make a point: less regulation means more competition. And more competition translates to a freer market. Why is this a good thing? Because there would me no monopolies. And prices would not only have to come down, but become publicly displayed. How many times have we all felt a pang of uncertainty and dread upon walking into a doctor’s office and meeting nothing but blank stares and admissions of ignorance when we ask the receptionists (and even the doctors themselves!) the very reasonable question, “how much is this going to cost?”

Now, imagine a free market version of the healthcare industry. You have various practitioners who are allowed to utilize more affordable options, equipment, legal processes, etc. to provide everything from the operation itself, to medication, to insurance – all due to the fact that government regulations no longer stifle these options. As a result, healthcare becomes not only more affordable across the board, but more competitive. Don’t like the advertised prices of your current dentist? Try the guy across the street with just as good reviews but visibly lower prices. Want a more affordable may to pay for your surgery? Go with the doctor who offers a more reasonable payment plan than the others. The possibilities and affordability both become second nature aspects of the process of getting medical care overnight the moment a free market approach is applied to healthcare. So why in the world should anyone push for more regulations rather than less?