Edward Gonzalez advocates a return to a free market in health care.
-Stream line new drug and medical technology approval process
-Allow insurance companies to compete across state lines

Problem:  The cost of health care has risen dramatically in the past years.  Although advancements in health technologies have increased, these services are prohibitively expensive and basic services are costing more each year.  Many Americans find themselves unable to afford basic health care, health insurance, and bankrupt when emergencies occur.  As with many problems, people tend to focus so much on the problem itself that they forget to look for the root cause. 

The federal government has instituted many health regulations with the good intention of keeping the American people safe and healthy.  The problem is that these regulations disregard basic economic logic and take from people the right to make their own decisions. 

The Food and Drug Administration’s budget request for 2009 was 2.4 billion dollars and it regulates over one trillion dollars worth of consumer products.  New drugs require tests and FDA approval that in many cases take over ten years and over a hundred million dollars to fund.[1]  It is impossible to say with any certainty exactly how many resources are devoted to complying with all the FDA’s regulations, but one fact is evident:  Without all these government regulations the cost of healthcare would be significantly lower.  A regulatory agency is certainly a good service and one for which most people are willing to pay.  However, when the government controls this regulatory agency, it institutes a coercive monopoly so no competing agency is allowed to enter the market and improve the service and push costs down.

In addition, there are a multitude of laws forced on employers and insurance companies that state what medical services they must provide.  These laws were probably done with good intentions, but have inadvertently caused basic health costs to rise and made obtaining private insurance outside of a company provided plan very difficult for most people.  An analogy would be if government law mandated that all auto insurance covered oil changes, new tires, replacement engines, and gas.  Then further government regulations mandated that employers offer auto insurance.  This would result in auto insurance premiums skyrocketing making it very difficult for individuals to afford auto insurance and older cars being denied insurance due to “pre-existing conditions.”

The purpose of insurance is to assist individuals through an unforeseen accident or disaster.  Its purpose is not to pay for every little luxury. 

Goal:  A society where basic health care costs are affordable to all Americans, healthcare insurance is available to those whom desire it, and advanced, expensive healthcare technologies become more accessible and less expensive every year.

Solution:  The are two major reforms congress can enact inorder to push healthcare costs down while increasing quality of care.

The first is to privatize the Food and Drug Administration.   The inspection of food and medications is a valuable service in a modern society and economy.  If the FDA can provide this service at a good price it will do well as a private agency.  There are many ways the FDA might accomplish this; they might sell a book directly to consumers, publish a free webpage and sell advertising, or sell a seal of approval to food and medical companies they have inspected.  The service they provide would be funded by voluntary payment.  This would also allow competitors to enter the business of certifying food and medications and push the cost of the service lower.  The point is that in the absence of a government approval process, there will be multiple private agencies all competing against one another to provide the best service at the best price.

 In addition to competition, repealing all federal health care regulations would give individuals the choice whether to use unregulated medications.  For example, a terminally ill patient today is not allowed to use experimental treatments until the FDA has approved the treatment.  The person must then apply to get approval to try the experimental treatment.  In the absence of government regulation, the choice of whether a terminally ill patient uses an untested treatment is left to that individual and their loved ones.

 By repealing mandates on what employers and insurance companies must provide would return health insurance to its natural role as accident and disaster protection.  This will cause an immediate drop in health insurance premiums.

 Limit government intervention in the health care industry to the investigation and prosecution of fraudulent activity.  Government inspectors would still exist, however, like the police, proof would be required before shutting a company down or holding up their operations.  By repealing federal health care regulations, companies would be free to operate within the confines of the law and government would only intervene when a company’s products or practices were proven dangerous or fraudulent.

 The Food and Drug Administration and government health care regulations have been pushing the cost of basic health care higher and higher every year.  Privatize regulation and repeal the laws and the health care industry will respond like all other industries in a free market:  Service will improve and costs will go down.

The second step Congress must take is to allow insurance companies to compete across state lines.  Currently, a person living in California is prohibited from purchasing insurance from a company in Utah.  This practice reduces competition and allows insurance companies to keep their premiums artificially high.  Allowing individuals to purchase the insurance plan of their choice would immediately bring costs down.

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[1] http://fdareview.org/approval_process.shtml