Anonymous Liberal makes a number of good points about why healthcare doesn’t behave like the free marketeers would have us believe:
While some services are elective (and these are already paid for out-of-pocket), the vast majority of medical services are not. If you have a heart attack, you are whisked away to the nearest hospital and operated on. There is no time or opportunity to shop and compare rates. Even for non-emergency care, you usually don’t know what you need until you’ve seen a doctor. And at that point, it’s not very realistic to expect people to get second and third opinions and compare prices (“please don’t treat me, doc, I’m just browsing”). Going to the doctor is a major inconvenience, usually requiring time off work. People don’t like doing it. They just want to be treated and leave. And many don’t even have the option of shopping around. If you don’t live in or near a big city, your options are generally limited. Many people only have one hospital in their area.
Moreover, not being doctors themselves, most people lack the knowledge necessary to meaningfully compare services. Sure, they might be able to determine who’s cheaper, but that doesn’t really help. If anything, I’d be tempted to go with the most expensive provider, on the assumption that what costs more is better quality. I may be willing to buy the bargain brand toilet paper, but when it comes to my life, I’m not fooling around.
Perhaps most devastating to this argument, though, is the reality that when people are forced to pay out-of-pocket for medical expenses, they generally stop going in for routine preventative care and monitoring. This results in worse health outcomes (and unnecessary deaths), and has the perverse effect of raising health care costs. Preventative care has repeatedly been shown to reduce overall costs by heading off (i.e. preventing) the occurrence of conditions that are much more expensive to treat.
Finally, there’s a reason why we rely on insurance to pay health care costs. It’s the same reason we have car insurance and home owner’s insurance: without pooling risk, the costs would be unmanageable. Most people don’t have the financial resources to pay out-of-pocket to settle a lawsuit with another motorist or rebuild their home after a fire or pay for a heart transplant. The only way such things would ever be affordable to an average person is through participation in a large risk pool (i.e. buying an insurance policy).
The fact is that socialized medicine works. It works in other countries and it works in the US, in the form of Medicare. The people will eventually be served on this issue, if we still have a democracy.