Category Archives: Regulations

Licensing, Regulation, and a Free-Market in Healthcare

When most people consider healthcare deregulation they have mental images of quacks with rusty scalpels butchering their unfortunate customers, and feel relieved that good ole’ Uncle Sam is watching out for them. This is founded on false assumptions and propaganda.

Many people assume that if healthcare is of a poor (relatively speaking) quality, that means that it causes harm, and it would be beneficial if its production were forcefully stopped. Poor quality healthcare is not necessarily harmful(harm being defined as a reduction in wellbeing, or an increase in uneasiness) because some people prefer healthcare of a lower quality, therefore by definition it brings about a perceived benefit(benefit defined as an individual’s advancement towards their subjectively valued ends) to those individuals at the time of the sale (otherwise they wouldn’t buy it). Furthermore, the people who do prefer low-quality healthcare are hurt by the forceful prevention of the production of this care because there is a loss of benefit to that person; if the individual valued low-quality healthcare more than no healthcare or a higher-quality healthcare, that would mean that the person valued the high-quality healthcare or no healthcare at all less than the low-quality care, so banning the production of low-quality healthcare would cause the person to accept the next most valued alternative, thereby bringing about a decrease in benefit (harm) to the individual the ban was supposed to help, thereby defeating the purpose of the ban(to benefit people by getting rid of low-quality healthcare). Licensing and regulation are the most detrimental to the poor because they make the poor pay for expensive, unaffordable healthcare, which consumes a larger percentage of their income relative to wealthier individuals, or make healthcare impossible for them to obtain. In short, it is impossible to determine what constitutes “good” or “bad” healthcare for others – only individuals can determine that for themselves because whatever standard is being used can only be subjective to the value judgments of the individual making it, which means that any attempt to stop others from purchasing or producing healthcare is harmful, particularly to the poor.

If regulations and licensing can only be hurtful, why do people believe in and advocate for them? We can only guess, but there are a two likely motivations. First: ignorance. The common justification for regulations and licensing has a plausibility on it’s surface, and is easily accepted by people who don’t want to look into it further. Second: government-enforced monopoly. Regulations and licensing keeps those who don’t meet the requirements from competing with those who do. Decreased competition means higher profits, which means that it is in the interest of doctors’ unions and pharmaceutical companies to lobby for legislation that would restrict the permitted providers of healthcare to the lobbyists and prevent competition: regulations and licensing. Hence, most regulations and licensing is not so much focused on protecting people, but focused on making it cost-prohibitive and difficult to qualify for becoming a producer of healthcare. The FDA drug approval process which denies people access to life-saving and life-improving drugs so that drug manufacturers can prevent competing drugs from being produced and forbidding experienced doctors who received their medical education in a foreign country from practicing medicine so that doctors educated in the United States have a monopoly on medical care are two of the most obvious examples. The American Medical Association is a government backed doctor’s union that is responsible for much of the legislation and restrictive requirements related to medical practice – if the supply of doctors is restricted, their price increases. The AMA not only restricts people from competing with it’s members, but it also regulates which medical practitioner can practice which aspect of medicine and which colleges and universities “qualify” to give medical degrees and how big their class sizes are to be. The DEA and the FDA requiring prescriptions for the purchase of some pharmaceuticals is designed to benefit doctors by forcing people to pay a doctor to be able to purchase medicine. Also dangerous is that these organizations like the AMA and FDA put their official stamp of approval on healthcare providers, drugs, and devices, and lull people who believe these government organizations exist for their safety into a dangerous false sense of security. To conclude, licensing and regulations exist because special interests want to rob people, and the government is more than happy to accept lobbyists money in exchange for that power, and because people are bombarded with propaganda and not exposed to the truth.

What would free-market healthcare look like? Although it may seem counter-intuitive, the quality would increase and the cost would decrease, both of which would be caused by the increased competition. If people cared about safety and quality(and everything suggests they do), there could be rating companies which would inspect and rate the safety and quality of the healthcare provider’s procedures and environment. There would most likely be a contract between the provider of healthcare and the customer that stated the procedures the healthcare provider would follow(sterile equipment, doctors with medical degrees from good colleges, nurses who had been trained in nursing, etc.), and the provider would be liable for any complications resulting from non-adherence to the contract, along with having to pay restitution to the customer for fraud. People who purchased low-quality healthcare would do so at their own risk. Medical innovation, unencumbered by the FDA, would skyrocket. People could buy any drug they wanted, and pharmacies could offer the service of a pharmacist who would advise what drugs the customer should use, and the amount and frequency of use along with the side effects. Anyone who wanted to provide education on producing healthcare could. Simply put, anyone who desired to provide healthcare could(whether anyone would accept it is another matter), and anyone who wanted to purchase any kind of healthcare would not be restricted from doing so.

Needless to say, these reforms are not popular, but free-markets and freedom are more necessary than ever to fix the broken healthcare system that is too expensive, too primitive, and too callous to the needs of healthcare recipients. Licensing and regulations exist to benefit big pharmaceutical companies and doctor’s unions with monopoly prices by severely restricting competition at the expense of everyone’s health and prosperity.