The current system is not a free market; it is a set of government rigged rules that ensure that the insurance and pharmaceutical industries prosper,

Fixing Health Care: Not Government vs. Market | By Dean Baker | t r u t h o u t | Columnist | Tuesday 10 July 2007

With "SiCKO" rallying popular support for universal health care coverage, defenders of the insurance and pharmaceutical industries are shifting into high gear with their scare tactics. The key to their efforts is to frighten people about the prospect of the government managing their health care.

Whether or not this sounds scary, the reality is that the government already structures the way in which we receive health care. However, the current pattern of government intervention ensures high profits for the insurance and pharmaceutical industries; it is not designed to provide adequate health care.

Starting with a very simple but important form of government intervention, insurance contracts are enforced in a very different way than most other types of contracts. When a person fails to disclose information on an insurance contract, it is grounds for voiding the contract. This means, as shown in "SiCKO," if a person did not report a pre-existing condition, even if it seemed trivial and irrelevant at the time, an insurance company can treat this fact as grounds for voiding a policy and not paying claims.

By contrast, most contracts have a buyer-beware structure. If I buy a house and didn't bother to notice that the roof was falling in, that's my problem.
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It can be argued that if the government restructured the law on insurance contracts that the private insurance market would disappear. Given the incredible inefficiency of the private market (administrative costs in the United States are approximately 10 times as high as in Canada), it is not clear why we would want a government intervention that makes the market less efficient.

Similarly, patent monopolies are one way in which the government can promote innovation. It is almost certainly not the best mechanism. We need a real discussion of the alternatives to patent monopolies.
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But, if we are ever going to think seriously about how best to restructure health care, we will have to clearly understand how the system works now. The current system is not a free market; it is a set of government rigged rules that ensure that the insurance and pharmaceutical industries prosper, and that tens of millions of people go without access to care.