Competition Would Save Medicine, Too

June 10, 2009 — -- Competition so regularly brings us better stuff -- cars, phones, shoes, medicine -- that we've come to expect it. We complain on the rare occasion the supermarket doesn't carry a particular ice-cream flavor. We just assume the store will have 30,000 items, that it will be open 24/7 and that the food will be fresh and cheap.

I take it for granted that I can go to a foreign country, hand a piece of plastic to a total stranger who doesn't speak English ... and he'll rent me a car for a week. Later, Visa or MasterCard will have the accounting correct to the penny.

Compare: Governments can't even count votes accurately -- or deliver the mail efficiently.

Yet now, somehow, government will run auto companies and guarantee us health care better than private firms can? And the public seems eager for that?

If you think it's mainly the political class and mainstream media that are clueless, listen to the doctors. Dr. Atul Gawande, in an otherwise interesting New Yorker article on health-care costs, disparages medical savings accounts and high-deductible insurance. First, he explains the theory behind this proposal to cardiologist Lester Dyke:

"[People would] have more of their own money on the line, and that'd drive them to bargain with you and other surgeons, right?"

Gawande comments, "He gave me a quizzical look."

The doctors then dismiss the idea with a sneer.

"We tried to imagine the scenario. A cardiologist tells an elderly woman that she needs bypass surgery and has Dr. Dyke see her. They discuss the blockages in her heart, the operation, the risks. And now they're supposed to haggle over the price as if he were selling a rug in a souk? 'I'll do three vessels for $30,000, but if you take four, I'll throw in an extra night in the ICU' -- that sort of thing? Dyke shook his head. 'Who comes up with this stuff?' he asked."

I do. Adam Smith did. Market competition is what's brought us most of what's made life better and longer.

But the doctors have mastered the anti-free-market sneer: Markets are good for crass consumer goods like washing machines and computers, but health care is too complicated for people to understand.