Health Care and Markets

The Unites States is a country of great wealth (1). This wealth is spread unevenly, and, for the most part, people accept that. That’s how capitalism works.  Differences in wealth are ok, capitalists point out, as long as everyone’s standard of living is high. Yet, more than 40 million Americans are without health insurance.  While some choose to go without coverage, deciding that it is in their best interest to remain uninsured, many want coverage but cannot get it. A number of factors explain why people may not have health insurance, including unemployment or working for an employer that does not offer medical benefits.  

On a moral level, for a country with such tremendous wealth to leave so many people without health insurance is unconscionable. Challenging such a forceful judgement, capitalists argue that expecting a market, any market, to NOT leave people out is irrational. Naturally, they continue, without intervention, some people are and always will be left out of most markets, usually due to a lack of money.  A core issue in the health care debate, then, revolves around how best to address those left out of the health insurance market. To think deeper about markets, it helps to review what they are and how they function.

In economics textbooks, a market is described as an environment where buyers and sellers freely interact with each other for the purpose of conducting mutually beneficial exchanges. Some sellers may attract lots of consumer attention, while others are barely noticed. Why? Either the products a business is selling are judged undesirable by consumers or their prices are too high. Markets reward business owners who provide goods and services that are desired by the public. Businesses that do this and can do it with low prices are rewarded even more. If multiple business owners are competing for the same customers, even better. Prices decline to attract customers and consumers benefit. 

       While the real word is complicated, this basic textbook description of a market should sound familiar. On a daily basis in the United States, we are surrounded by businesses competing for our dollars. The Internet, with websites such as E-Bay and Craigslist, provide consumers with ample opportunities to interact in virtual markets, proving that one person's junk is another person's treasure. Can the power of the market be harnessed to provide a solution to our health care system? Or, do we have millions of uninsured in our country precisely because we have relied too heavily on markets? And what role, if any, does the federal government play in addressing these issues? (more posts on this topic to come!)                           
1. US ranks 11th GDP per capita (https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html)
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