NCPA - National Center for Policy Analysis


February 26, 2009

In normal markets, entrepreneurs in search of profit often spur cost efficiencies and quality improvements.  Under Medicare, by contrast, entrepreneurial efforts find their greatest reward when they exploit the system rather than improve it, says John C. Goodman, president of the National Center for Policy Analysis.

Entrepreneurs are creating new products to fill needs that traditional health insurance does not meet.  For example:

  • People can purchase blood tests via the Internet and get results in 24 hours.
  • They can get low-cost care with very little waiting at walk-in clinics in shopping malls.

Yet these services are often hampered by outmoded, unnecessary government regulations.  Amazingly, doctors are prohibited from owning and operating walk-in clinics that refer patients to their regular practices!

The solution is to deregulate the Supply Side, says Goodman.  As a regulator of care, government has erected many obstacles.  For example:

  • It is illegal for a doctor practicing on the Texas side of Texarkana to treat a patient by phone on the Arkansas side of the same city.
  • It is illegal for a doctor practicing in East St. Louis (Illinois side) to interpret x-rays taken for a patient treated in west St. Louis (Missouri side).

Unless these relics of misguided regulatory excess are repealed, the services accessible to each of us will be limited by the borders of the state in which we live, says Goodman.

Although the federal government should move cautiously in overriding state regulatory barriers to efficiency, the case for change is strong.  A national market for provider services should be established quickly, suggests Goodman. 

Source: John C. Goodman, "Free the Entrepreneur," National Center for Policy Analysis, Brief Analysis No. 647, February 26, 2009.

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