That’s good news. $2 trillion in savings in healthcare costs over the next 10 years. $200 billion per year.The group claims the savings from their plan will save $2500 per year in healthcare costs for a family of four. And, by itself, virtually eliminate the federal deficit.
Many of these members, drugmakers, insurers, hospitals and the American Medical Association were among the harshest critics of a similar reform plan by President Bill Clinton in 1993. The insurance lobby, for instance, sponsored the "Harry and Louise" ads that ultimately turned popular sentiment against reform efforts, according to the article in today's Washington Post.
This possible change of heart by the healthcare industry was forced, not chosen. And it was forced by the outcome of their decisions that have brought us to the point where healthcare costs absorb upwards of 16% of our GDP today, projected to exceed 25% of our GDP within a decade.
It’s an industry that proclaims itself the most efficient, yet whose combined costs to administer its services are greater than its counterparts in any other industrialized nation. And our system fails to cover 15% of our population compared to 100% coverage offered through their system.
These results are the results of an industry where the principles of free-market competition have long been submerged except in the claims of PR agencies, lobbyists, and partisan-politicians whose donor lists are filled with members of this same trade group.
These results are the results of an industry most accurately described as an oligopoly. What’s an oligopoly? Let’s look at a few definitions:
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers
This causes oligopolistic markets and industries to be at the highest risk for collusion.
the market condition that exists when there are few sellers, as a result of which they can greatly influence price and other market factors.
What Does Oligopoly Mean?
A situation in which a particular market is controlled by a small group of firms.
A few sellers within each trade group of the healthcare industry have met and decided to greatly influence prices and market factors. This industry was able to collude in the 90’s to prevent reform. It’s able now to collude to prevent the entrance of the only effective source of competition: the federal government.
Those market factors in effect are our economy. By effectively colluding to prevent reform in the 90s and by colluding to create effective barriers to entry of innovative, competitive, alternatives the industry has been able to claim a disproportionate share of our economy. That share is a share that does not add to our ability to innovate new technologies, nor compete on a global scale. For that matter, they have colluded to prevent the increase in the quality of our health seeing cost-effective solutions as a threat to their profit goals.
The irony that our most inefficient federal government can out-compete our healthcare industry, particularly the health insurance trade group, seems lost on those who decry the threat of the federal government offering an affordable, competitive, option for US consumers. Some members of Congress have said the reason why the federal government should not offer a health insurance/healthcare option is that it would win against the current offerings available. That means that the federal government would be more competitive, more efficient, than the free-market offerings available now.
Free markets, operating freely, should not allow an industry to flourish whose only competitor is the federal government. Even more so, a free market should not allow the federal government to outcompete it. Proponents of free-markets and competition should not support industries who cannot compete against the federal government.