Building a True Market in Healthcare

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The “market” is simply the voluntary exchange of individuals making choices to improve their lives. As such, even the force of government is not able to stop it, although government intervention can and does distort the choices people make and creates incentives that are often detrimental to society. Even in a fully socialized economy like the Soviet Union, the market continues to operate since it is ultimately based on human action. Under the force of total state control of the economy, black markets emerge that can provide essential services that the state strictly forbids.

Fortunately, we have yet to reach this point in the United States, although there are a growing number of voices calling for more socialism to rectify the supposed “failures” of the free market and capitalism. Ironically, the areas where these people call for the most government intervention or outright socialism are the economic sectors where the voluntary choices or individuals are most regulated and controlled by the State—most notably—education and healthcare. It would be far-fetched to characterize the current crony arrangement in the health industry as “free market”.

The Free Market Medical Association is a growing movement of independent physicians, surgeons, specialists, surgery centers, and other medical service providers who are effectively building a market-based healthcare system operating alongside and outside the current system. The American health system is highly regulated in the interest of crony hospital and insurance insiders. This is a result of years of government intervention in the direct relationship between buyers and sellers of healthcare goods and services. These interventions have effectively forced central economic planning in healthcare, driving up costs while reducing quality.

The great 20th century economist Ludwig von Mises said, “Thoughts and ideas are not phantoms. They are real things. Although intangible and immaterial, they are factors in bringing about changes in the realm of tangible and material things.” Mises viewed economics as a discipline in which every individual needed to be educated. It is not just for academics and government statisticians who fill the ranks of most mainstream economics departments. Free market ideas must ultimately prevail over the failed ideas of socialism and other forms of interventionism for any public policy to be significantly different.

Those of us who believe free markets are the most efficient means to achieve human prosperity are frequently disappointed that our educational efforts are slow to take root in the minds of the public. This can lead us to focus on all the things that are wrong with the current system. The good news is that in addition to great educational efforts by organizations like the Mises Institute, there is a rising tide of free market sellers of medical services who are creating a true market. They are providing real value to consumers who have been driven back to the marketplace through rising premiums and deductibles in their current health plans.

This may sound crazy, but one does not have to ultimately believe in the principles of the free market in order to help bring it to bear in society. Just as the person claiming to be a “socialist” will spread his ideas on an iPhone and take an Uber to Starbucks, every individual or business owner looking for value in healthcare will naturally gravitate to the best the market can provide when those markets are free to innovate and purchase decisions are personal and local rather than homogeneous and centralized.

We believe this movement is on the verge of a revolution in how healthcare is provided and purchased. With a critical mass of free market sellers now available, self-funded employers represent the ultimate game-changing group of “buyers” to drive the cost of healthcare down. Self-funded employers who adopt the free market model can effectively provide more value to their employees.

We invite all buyers and sellers of healthcare to join this movement to bring honest price transparency and value back to healthcare. Members of the FMMA are building a successful market alternative in medicine. The force of this market combined with even a small fraction of the number of value-seeking consumers in self-funded health plans will make this movement unstoppable.