Note to my faithful reader(s): I wrote part 1 of this 2-part series as a response to a debate prompt on helium.com, an online writers' community. Imagine my shock when, the very next morning, I saw a new prompt on that same site asking whether further privatization and deregulation of the healthcare system would solve the problem. I was forced to chime in on this, and the following was the result:
Many Americans believe that the solution to our healthcare dilemma is to further privatize and deregulate the system. If we free up the healthcare market, there is some reason to believe that it will behave like other free markets - costs will go down, allowing more people to get insurance, and quality will go up. This is the basis behind most Democrats' plans for what they call universal healthcare. However, this notion fails to take into consideration a few basic aspects of the healthcare system that make further privatization and deregulation a bad idea.
Firstly, the limited market. Let's say you're in the business of selling cars. It can reasonably be assumed that cars will never go out of style, and that, as more and more people around the world reap the benefits of industrialization, one of the things they will buy with their newfound money will be cars. Therefore, in this day and age, the automotive industry has a virtually unlimited market. This causes car companies to compete with each other for the constant stream of new customers. This is one of the prerequisites to a truly successful and beneficial free market: If there is not a growing market, a good deal of the helpful competition simply does not happen. If you've been buying Ford cars your whole life, you're less likely to go out and buy a Chevy, almost entirely regardless of the corporate competition going on. On the other hand, someone who is a first time car buyer reaps the full benefits of capitalism - Ford and Chevy both want them, so they'll both lower their prices and increase the quality of their products to win them over.
Healthcare doesn't work this way. There are a limited number of people in the United States (with a yearly population growth of less than .9%), and an even smaller number of people who are not already insured. Once all of those 40 million or so people got coverage, the burst of corporate competition that brought that about would immediately come to a halt. And after that point, there would be virtually NO market growth, and very limited competition, and corporations would be free to hike up their prices as much as they see fit. If the only two car companies in America were Ford and Chevy, and neither company had any new customers to entice, what's to stop them from both, little by little, increasing their prices?
This leads me nicely toward the second reason further deregulation of healthcare is unfeasible: the obvious greed of the conglomerates which currently have control over the system. If, as in the aforementioned scenario, they became able to raise their prices, they absolutely would. These corporations clearly do not hold themselves to very high moral standards - just watch "Sicko", or ask any of the millions of people who have struggled with their health insurance providers. Corporations that make money based on not giving people healthcare would have no qualms about raising prices, if it was a feasible business practice, which it is now and still would be under a further deregulated system. Even though the initial burst in competition would probably allow many of the currently uninsured people to become insured, eventually corporations would raise their prices again, once again excluding more and more people from the system while keeping corporate profits intact, and even growing.
Even if further deregulation and privatization of healthcare worked, and managed to permanently extend insurance coverage to all Americans, there still exist fundamental flaws in ANY privatized healthcare system. HMOs profit, and the system survives, based on how much healthcare they can deny their customers. This proposed plan would only give that same crappy coverage to everyone. That's like having an automotive industry in which Ford increases its sales and profits by building cars that break down beyond repair at 5,000 miles. And it's even worse, because we're not talking about a luxury, but a basic human right.
Clearly, this proposal is not the right way to handle the healthcare crisis. The best answer to our healthcare woes is not further "freeing up the market", but changing the entire system to a universal, single-payer, and yes, socialized plan.