In economic terms, the healthcare industry is somewhat like a utility. It has price inelasticity of demand because of necessity: people will pay whatever price is demanded when they require healthcare. The “supply” (medical professionals) is inelastic as well (due to scarcity). The reason insurance is required is that many times when care is needed, the cost can be so prohibitively expensive it can bankrupt you. To put this in layman’s terms (from another sort of Rude Pundit by the name of Cranky Media Guy): ["inelasticities" added]
Health care is not (and cannot become) a free market for two reasons:
1) Supply is artificially restricted [inelastic] by the government and the AMA. The scarcity of medical care drives up the cost. This is completely artificial. You might say “Well, they have to! You can’t have just anyone practicing medicine!” Fine, I agree, but that means that health care CANNOT EVER be a free market, because of the artificial restriction of supply.
2) Not only is supply artificially low, but buyers are under EXTREME compulsion to buy. [price inelasticity of demand] …What, that thought never occurred to you!?!? If you need lifesaving medical care, you either get it or you die!
This is why almost every other industrialized country in the world has some model of universal healthcare—those countries recognized that the healthcare industry does not (and cannot) operate by free market principles. It takes up more of our GDP than any other country by a wide margin, and continues to take up a higher and higher percentage (in September, 2011, it reached 18%), which is a serious national problem in and of itself:
But if health care spending continues on its same trajectory, the United States will reach the point — probably several decades from now — where every penny of the annual increase in gross domestic product would have to go for health care. There would be less and less money for other things, like education, environmental protection, scientific research and national security, that may be equally or more important to the well-being of society.
That all being said, let’s take a look at some of the reasons that John Boehner’s statement that the U.S. has the “best healthcare delivery system in the world” never reaches its destination, even with the help of PolitiFact.
According to a Harvard Medical School Study (American Journal of Public Health, December 2009), lack of health insurance is associated with as many as 44,789 deaths per year in the United States and people without health insurance had a 40 percent higher risk of death than those with private health insurance, a result of being unable to obtain necessary medical care. In 2010, the percentage of Americans without health insurance was 16.3%, or 49.9 million uninsured people (source: US Census Bureau). It should be over 50 million by now.
And what are some of our healthcare outcomes? Not too good:
In 2005, the United States ranked 30th in infant mortality. In 2011, we rank #50.
Life expectancy at birth in the United States is an estimated 78.49 years, which ranks 50th in highest total life expectancy compared to other countries ( Source: CIA Factbook [2011]).
We have the highest percentage of obese (30.6%) (And guess where it’s the highest in the U.S.?).
We are #13 for most deaths from heart disease per 100,000 people (average is 102.9 and the U.S. is 106.5).



