The Free Market Leads to Better Health Care Outcomes

May 29, 2014

The recent Veterans Administration (VA) scandals involving long delays for obtaining health care are indicative of the problems caused by socialized medicine, writes NCPA Senior Fellow Peter Ferrara.

Since the government pays for health care for veterans, builds health facilities and hires medical workers, the VA system operates in much the same way as the British National Health Service (NHS). The notoriously strict rationing system of the NHS is due to the fact that the government must find a way to control costs, leading the government to deny care.  Similarly, the American VA system lacks market prices, incentives and competition. To operate within the VA budget, bureaucrats deny care through some form of rationing.

Real solutions for the VA would come with private, free-market reforms. Similar reforms are needed in the Medicaid program as well as the U.S. health system in general.

  • The VA budget could be divided into equal shares for every veteran, allowing them to purchase private insurance and use Health Savings Accounts (HSAs), which maximize patient choice and control over their care and their money.
  • Federal Medicaid funds could be block granted to the states. This would allow states broad authority to reform Medicaid in a way that works best for its citizens. States could reform their Medicaid programs by providing insurance vouchers to the poor.
  • Obamacare threatens both supply and quality of health care. Instead, the government could provide a universal tax credit for all citizens that could be used to purchase the insurance of their choice.

Free-market solutions will help lower the costs of health care and increase access while simultaneously helping to spur job creation and increase take-home pay for employees, says Ferrara.

Source: Peter Ferrara, "Transform the VA Into a Pro-Growth Model for First Rate Health Care," Forbes, May 25, 2014.

 

Browse more articles on Health Issues