Thread by @checkmatestate

How to explain libertarian health reform to Normies:

There are 3 steps to curing US healthcare.

Our healthcare system is sick. With any sickness, you need to understand the cause of the disease before you can successfully treat it. Healthcare is the same way.

FIRST THING TO UNDERSTAND: How prices increase in general.

If you want the price of something to increase in a competitive market, there are 2 strategies you can use.

1. Increase demand
2. Decrease supply

(AKA the law of supply and demand)

(This is why when OPEC meets, they don't set a price for oil. They give each country a maximum number of barrels that they can produce. This has the effect of increasing oil prices- at least until countries cheat or new entrants in the oil industry reduce the effect.)

In America, the AMA and hospitals have been very effective at increasing the price of medical services by DECREASING THE SUPPLY of medical service providers. They do this in partnership with government through licensing laws, medical school accreditation and certificates of need.

STEP ONE TO FIX HEALTHCARE: Stop all government programs that decrease the supply of medical providers. Many of these programs are sold to the public as a way to ensure quality. Their real purpose is to increase the price.

These programs (licensure, accreditation, etc.) actually have the effect of lowering the quality and safety of medical care. Licensing boards rarely discipline dangerous doctors. 400,000 people die from medical error every year in the US.

Great article:
gsb.stanford.edu/insights/shoul…

SECOND THING TO UNDERSTAND: Moral Hazard

Moral hazard basically means if you are not paying for something directly, you act different. For example, you might take more risks, consume more than you would otherwise or be less price sensitive.

Imagine your employer provided pre-paid food insurance. Would you consume food differently? Would you eat more? Would you buy more steak? Would you shop around to find the lowest price?

Health insurance has the same effects. We consume more healthcare & aren't price sensitive.

Some people argue that moral hazard is not an important factor in healthcare markets because it is literally life and death, so price has little effect on how much healthcare people consume. This has been disproven:
rand.org/pubs/research_…

This argument also underestimates how important price sensitivity is. Even though healthcare is important, you would still expect competitive pressure to drive price down. This does not happen in healthcare because consumers of healthcare are not seeing the price directly.

Catastrophic health insurance (insurance that only kicks in when you have very expensive services) has these effects to a much smaller degree than traditional health insurance. But traditional employer-based health insurance is a creation of the state:
nytimes.com/2017/09/05/ups…

STEP TWO TO FIX HEALTHCARE: Eliminate tax incentives and regulations that prop up the highly inefficient employer-based pre-paid health insurance. This would naturally lead to more catastrophic health insurance and less moral hazard.

THIRD THING TO UNDERSTAND: The FDA really really sucks. It increases prices dramatically by increasing the cost of R&D. It does very little to increase safety of drugs. And it delays the adoption of life-saving drugs. These delays directly cost lives.

For more information about how the FDA kills people and is ineffective at protecting us, I recommend this episode of the @ThomasEWoods Show with @MaryRuwart
tomwoods.com/ep-1124-death-…

STEP THREE TO FIX HEALTHCARE: Eliminate (or at the very least, dramatically decrease the mandate of) the FDA.