Why Prices Matter Pt. 2

by John Goodman

Source: Health Affairs Blog

In a previous post, I argued that the single biggest mistake in health policy is the belief that the best way to make health care accessible is to make it free at the point of delivery. In this post I will argue that the second biggest mistake is the belief that the best way to help people with chronic illness is to prohibit health insurance premiums from reflecting expected health care costs.

In my new book, Priceless: Curing the Healthcare Crisis, I show that in both cases we have completely suppressed the price system. So much so, that in this sector no one ever faces a real price for anything. In the market for medical care, no patient ever pays a real price for care. In the market for health insurance, no employee ever pays a real premium.

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