What Might A Free Market In Healthcare Even Look Like?

In a recent healthcare post at The Money Illusion, some remarks in the comment thread caught my attention. Ashok Rao told Scott: "Health is one of the few places where I think the market fails absolutely and miserably." To which Scott replied: "How would we know, as the market has never been tried?"

Indeed, it has been so long since people were able to provide care in spontaneous settings that one would hardly know where to start! When doctors still made house calls, for instance, healthcare was but a mere fraction of the enterprise it has become. More than any other area of life, the activities lumped under this discipline are vast and diverse. And yet amazingly, we still struggle to operate in a system where specific individuals are expected to work along the full range of its capacity.  Time constraints alone mean that whole composites of  knowledge use potential are often subverted to "practical" plans of action. And those are just the activities which people widely agree would be useful, if indeed they could be applied. Bundling of information in other areas is often feasible (and sometimes helpful), but "bundling" in healthcare doesn't work well, because neither doctor or patient can really choose among sets of potentialities. That only leaves everyone speculating about lost potential benefits in everything from preventative care to alternative therapies.

Services in preventative care often takes a back seat in the U.S., but a provider's personal approach, technique and focus may suffer as well.  Today's necessary limitations in healthcare provisions also make it impractical to include ongoing research and development, in what were once spontaneous and relatively informal settings. While some might question such "unscientific" results, the research science does pay for comes at a much higher price, and is not as well aligned as incentives for informal research, where impartial results are the sought after and broadcast component. Informal research of the past took advantage of human ingenuity and the desire to meet personal challenges, and progress was often the reward. Because we expect research today to take place in the limited formal settings of existing institutions, many who would pursue their challenges have no realistic way to do so; or worse, the work they do goes unnoticed, unheralded, and never utilized. Thus products of highly controlled research efforts (that do get funded) are under tremendous pressure to pay off, which can misalign incentives for reporting actual product efficacy.

Small wonder that the careers of healthcare providers are compromised now, and people often think twice before they undergo the rigor of sacrifice that now entails becoming a physician, for instance. Caught between the definition of artificial knowledge scarcity and the common sense that says all need access to healthcare, the profession is now managed to a degree that puts the majority of healthcare workers on a treadmill.  One often starts out with a passion for what they do - only to burn out - because efficiency in this "scarcity"/necessity dichotomy means non stop focus on one's work and limited time with family. Women who hesitate at the expected full time sacrifice are sometimes discouraged from entering the profession, which is already limited to the "best of the best" to maintain a scarcity framework.

How could people create better free market options than this present day reality? First, it helps to remember that every individual's definition of optimal care and time use options is unique. Importantly, such definitions are not necessarily superior to one another, because those differences are about real human preferences on the part of providers and patients. Whereas, the amorphous product which emerges from a managed setting sees individual preference as out of budget or inefficient. Even "deviations" that make sense will be challenged by opposing factions within institutions, and may even show in media as "consumer outrage". There's always the chance that consumer "outrage" has been manufactured, i.e. the result of someone "stepping on the toes" of another special interest. Luckily, such knowledge subversion strategies are not in active play for most normal retail offerings, or the shelves of our stores would practically be bare.

Therefore, free markets in healthcare would also mean the possibility of "refilling the shelves" for knowledge/ skills offerings, as well as other products missing from mainstream managed care.
Fortunately, such dialogue has not been completely missing from DIY retail settings, for those who primarily manage their healthcare for themselves and their families (in non economic settings). Here, more options are available and are regularly debated as to efficacy. Bookstores have offered differentiated ideas of healthcare for decades. Some physicians also are able to reach out in various media with alternative methodologies which - even though they might appear mainstream in the present - are primarily so for the growing DIY marketplace which now also utilizes computers in retail settings for consumers to research illness symptoms. While consumers are fortunate for these over the counter help aids and their accompanying remedies, this DIY approach runs counter to the set up in managed care where the patient remains mostly in a passive role.

However there is a good reason why "taking healthcare private" in its current incarnation does not quite address doctor and patient choice in the aggregate sense. Today's defined scarcity also means less than half of the population in the U.S. would have good access if everything were simply privatized overnight. New definitions are needed for healthcare access. Realistically, not all of us have a right to healthcare, if we do not also have the actual right to heal one another. Therefore the individual's right to heal would need to be widely recognized by society, to overcome  today's rigid rules imposed by both governments and insurance companies. Such a right to heal would also make it possible for smaller communities to create and maintain healthcare access, especially since their citizens cannot always commute to the cities where so many of today's physicians wish to locate. In future posts, I will explain these possibilities further. A citizen's right to heal would also go a long way to address growing budgetary and demographic concerns,  so that tomorrow's generations could breathe a lot easier.