Blame the Government, Not the Market, for Exorbitant Health-Care Costs
September 13, 2007

Irvine, CA--The New York Times reports that employer-sponsored health insurance premiums have increased by 6.1 percent this year--not as high as last year's 7.7 percent increase, but still far ahead of wages or inflation--and that since 2001 they have increased by 78 percent.

"These statistics will be used by the advocates of collectivized medicine to say, once again, that the 'free market' has failed, and that we need some form of government-controlled 'universal health care' scheme," said Alex Epstein, a junior fellow at the Ayn Rand Institute. "But the truth is the opposite. These skyrocketing premiums are testament to the huge destruction that the government's massive control of healthcare to date has already wrought.

"Health-care is one of America's most controlled and socialized industries--beginning with the fact that we are all forced to pay for one another's health-care through Medicare and the government-induced third-party-payer system. In the name of the individual's 'right' to health-care and the government's 'responsibility' to provide it, the government has reached its tentacles into every facet of medicine, from how many doctors are allowed to be licensed to which medical professionals may perform what procedures, to what procedures insurance companies must provide on their plans. Is it any wonder that health-care is a mess?

"Observe that in the fields that are left free, like the computer and electronics industries, over time the cost of any given product generally goes down, not up. If medicine were left free, with individuals responsible for paying for their own care and insurance, and America's businessmen, doctors, and educators liberated to offer it at all different price points, we would see quality and price improvements like those for flat-panel television sets. Indeed, we already see this with the few realms of medicine that are left free; laser eye surgery, for example, has improved dramatically over the years while prices have fallen. We could see such developments with medical care as a whole--as soon as we agree to take responsibility for our own health, and get the government out of it."

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Alex Epstein was a writer and a fellow on staff at ARI between 2004 and 2011.