Tuesday, August 11, 2009

Hans-Hermann Hoppe on the healthcare reform we need

1. Eliminate all licensing requirements for medical schools, hospitals, pharmacies, and medical doctors and other health care personnel. Their supply would almost instantly increase, prices would fall, and a greater variety of health care services would appear on the market.

Competing voluntary accreditation agencies would take the place of compulsory government licensing--if health care providers believe that such accreditation would enhance their own reputation, and that their consumers care about reputation, and are willing to pay for it.

Because consumers would no longer be duped into believing that there is such a thing as a "national standard" of health care, they will increase their search costs and make more discriminating health care choices.

2. Eliminate all government restrictions on the production and sale of pharmaceutical products and medical devices. This means no more Food and Drug Administration, which presently hinders innovation and increases costs.

Costs and prices would fall, and a wider variety of better products would reach the market sooner. The market would force consumers to act in accordance with their own--rather than the government's--risk assessment. And competing drug and device manufacturers and sellers, to safeguard against product liability suits as much as to attract customers, would provide increasingly better product descriptions and guarantees.

3. Deregulate the health insurance industry. Private enterprise can offer insurance against events over whose outcome the insured possesses no control. One cannot insure oneself against suicide or bankruptcy, for example, because it is in one's own hands to bring these events about.

Because a person's health, or lack of it, lies increasingly within his own control, many, if not most health risks, are actually uninsurable. "Insurance" against risks whose likelihood an individual can systematically influence falls within that person's own responsibility.

All insurance, moreover, involves the pooling of individual risks. It implies that insurers pay more to some and less to others. But no one knows in advance, and with certainty, who the "winners" and "losers" will be. "Winners" and "losers" are distributed randomly, and the resulting income redistribution is unsystematic. If "winners" or "losers" could be systematically predicted, "losers" would not want to pool their risk with "winners," but with other "losers," because this would lower their insurance costs. I would not want to pool my personal accident risks with those of professional football players, for instance, but exclusively with those of people in circumstances similar to my own, at lower costs.

Because of legal restrictions on the health insurers' right of refusal--to exclude any individual risk as uninsurable--the present health-insurance system is only partly concerned with insurance. The industry cannot discriminate freely among different groups' risks.

As a result, health insurers cover a multitude of uninnsurable risks, alongside, and pooled with, genuine insurance risks. They do not discriminate among various groups of people which pose significantly different insurance risks. The industry thus runs a system of income redistribution--benefiting irresponsible actors and high-risk groups at the expense of responsible individuals and low risk groups. Accordingly the industry's prices are high and ballooning.

To deregulate the industry means to restore it to unrestricted freedom of contract: to allow a health insurer to offer any contract whatsoever, to include or exclude any risk, and to discriminate among any groups of individuals. Uninsurable risks would lose coverage, the variety of insurance policies for the remaining coverage would increase, and price differentials would reflect genuine insurance risks. On average, prices would drastically fall. And the reform would restore individual responsibility in health care.

4. Eliminate all subsidies to the sick or unhealthy. Subsidies create more of whatever is being subsidized. Subsidies for the ill and diseased breed illness and disease, and promote carelessness, indigence, and dependency. If we eliminate them, we would strengthen the will to live healthy lives and to work for a living. In the first instance, that means abolishing Medicare and Medicaid.

Only these four steps, although drastic, will restore a fully free market in medical provision. Until they are adopted, the industry will have serious problems, and so will we, its consumers.

A Four-Step Health-Care Solution by Hans Hoppe


  1. These plans are not only irresponsible, they are ethically reprehensible. No FDA... just... wow. You realize that drugs are even now recalled for being unsafe because they arn't funded enough to do an adequate job, and you want to make it worse by turning the population in guinea pigs.

    And #3, deregulate the health insurance industry? What the fuck is wrong with him, did his mother drink? These people openly admit to dropping people's coverage when they became ill in order to earn more profit.

    #4 is laughable... he thinks it breeds disease? Are they going to put bacteria on the benefits checks?

    The only ideas with any merit are in #1, and even then you can't just simply eliminate licensing. Removing a lot of the hurdles wouldn't hurt, but I can't believe the person who cuts my hair or repairs my car might have more training than the person taking care of my body.

    This just proves you can't look at the world through economics anymoe than you can look at it through a brick. Do you think raising the cost of living will decrease the demand? Ask New Yorkers...

  2. I agree with Dr. Q to an extent. Maybe 1-2 years for a patent, to recoup dev and approval costs. However, the current 5-7 years is ridiculous.

    Altering the patent system would be much easier and more efficient than price fixing, which is what some socialist systems have opted for.

  3. Ginx: You are one ignorant motherfucker! Stop commenting on topics you know NOTHING about.
    FDA has killed more than it has saved by restricting access to livesaving drugs. Number 4 makes the most sense. Subsidies for the ill make people more reckless with their health since they don't have to pay for it.


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