Friday, September 05, 2003

Rights and Reason: Price Controls by Another Name

The Bush-Cheney reelection campaign is touting the president's "six point plan for the economy." Point #1 is quite telling:
Making health care costs more affordable and predictable. President Bush proposes to allow small businesses to pool together to purchase health coverage for workers at lower rates.
On first reading, this sounds rather uncontroversial and pro-free market. But that's only if you don't grasp the context. If health care consumers want to combine their purchasing power, that's perfectly fine. The problem is that healthcare providers--physicians and hospitals--don't enjoy the reciprocal right to join their economic power to negotiate with consumers. The FTC and DOJ claim it's "unfair competition" when physicians exercise the right Bush wants to expand for consumers.

The Bush administration gets this. That's why their message is that healthcare costs will be "more affordable and predictable" under his plan. Of course it will. If the government prevents physicians from negotiating in a free market, the costs will be kept down simply by force of law. This is what we used to call a "price control"; but in a Republican White House, it's given the name of "market reforms."

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