The Health-Care Nirvana Fallacy

by | Dec 11, 2024

The Health-Care Nirvana Fallacy

by | Dec 11, 2024

Someone explain how coercive centralized bureaucratic control of medical decision-making and the purse can beat the decentralized free market with its undistorted price system. The government has many things besides medical care it wants to spend tax money on, and seemingly free medical care leads to unlimited, unmanageable consumer demand for services. What then? Will the bureaucrats never say NO to many people who need or say they need care? Where will the money come from? Will there not be intolerably long and life-threatening queues for exams, tests, and surgeries? Will doctors work for low reimbursements or be drafted? Aren’t resources and labor limited and consumer demand unlimited? Someone square the circle for me.

Many people imagine a perfect medical system in which everyone can have everything he or she wants for the asking and without inconvenience. Nothing can compare to perfection, so case closed. This is the Nirvana Fallacy, judging the possible against the perfectly impossible. The government has steadily made the medical system worse, culminating in the Affordable Care Act (Obamacare) and its distorting mandates, regulations, and subsidies.

In contrast, the competitive, profit-motivated free market would expand the number of practitioners (now limited by government rules) and improve the quality and variety of services. It would create consumer price sensitivity (services would no longer appear to be free) while cutting prices through competition and increased services. As the price of medical care came down, so would the price of medical insurance, which would also be unencumbered by political mandates for coverage whether people want it or not. People would find it worthwhile to reserve insurance for catastrophic events only, covering predictable routine matters through their savings.

This is as good as it can get in a world of scarce resources and unlimited consumer wants.

Sheldon Richman

Sheldon Richman

Sheldon Richman is the executive editor of The Libertarian Institute and a contributing editor at Antiwar.com. He is the former senior editor at the Cato Institute and Institute for Humane Studies; former editor of The Freeman, published by the Foundation for Economic Education; and former vice president at the Future of Freedom Foundation. His latest books are Coming to Palestine and What Social Animals Owe to Each Other.

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