More Sticks and Fewer Carrots

Last week, I wrote about the government’s use of carrots and sticks to manipulate the behavior of home buyers. Now, in response to Trump’s new health care plan, a physician is calling for more sticks and fewer carrots regarding health care insurance.

Trump has proposed sending money directly to Americans rather than to insurance companies. Consumers could then purchase the health care insurance of their choosing. Dr. Elisabeth Potter argues that this won’t fix the fundamental flaws in America’s health care system. “Here’s [a] news flash. We have a monopoly. There is no choice,” Potter said. “That money that you’re sending into pockets of Americans, it’s getting spent at the company’s store manufactured by big medicine.”

Potter went on to say that Trump’s plan won’t hold insurance companies accountable. She suggests using more sticks: “A stick would be, ‘You can’t sell insurance for a year.’ A stick would be, ‘You can’t pay out dividends for a year. Let’s really hit people where it hurts to change behavior.” Potter wants insurance companies to change their behavior, and she wants to use government coercion to achieve it.

Potter’s solution to the inevitable problems caused by the government’s meddling in health care is more meddling. Apparently, freedom in health care isn’t a solution that has occurred to her or Trump.

Every segment of the health care industry is heavily regulated. As an example, in the early months of the COVID pandemic, manufacturers could not sell face masks without government approval. A homemade mask, such as a bandana, did not need government approval, but a mask made by a reputable company did. As another example, no drug can be sold without going through an approval process that can take a decade and cost billions of dollars. As a final example, the Affordable Care Act requires insurance companies to cover pre-existing conditions, a mandate that increases costs to insurance companies.

Government regulations increase costs and delay the introduction of products that can reduce suffering and save lives. If we truly want to reduce health care costs, we don’t need more sticks. We need more freedom.