The easy free-market solution to the healthcare problem

The ACA price is too high and the quantity available is too low. If this situation was applied to any other market, the solution would be obvious: Increase the supply of the product.

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WASHINGTON, January 9, 2017 — The Affordable Care Act is a failure. It failed to provide health insurance to all Americans. It failed to reduce healthcare costs. It failed to provide expanded, higher quality care and it failed to improve the patient-doctor relationship.

Now Republicans must come up with a way to fix the healthcare system.

While a number of alternatives are being considered, none really take a totally free market approach. The free market is what made the American economy the biggest and strongest in the world. To implement a free market solution, the problem must be examined at the very basic level.

There are two primary problems that have plagued healthcare for decades:

  1. The costs have increased at too rapid a pace.
  2. There are tens of millions of Americans who do not have health insurance and, as a result, do not receive quality health care. Many only receive healthcare on an emergency basis.

In other words, the price is too high and the quantity available is too low. If this situation were applied to any other market, the solution would be obvious: Take action to increase the supply of the product or service.

Look at the situation with gasoline. At one time, the price of gas exceeded $4 per gallon and, as during the 1970s gas crisis that led to rationing, there have been shortages of the product.

So why is gasoline currently priced at under $2.50 per gallon with abundant supplies available?

Because of new technology to find and secure oil, the supply vastly increased. That brought the price down and ended shortages.

A similar market-based solution can be used to solve the healthcare problem.


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Healthcare policy should be amended to increase the supply of doctors and other medical professionals. The increase in supply would bring about competition which always improves the quality of services, the quantity available to the market, and dramatically reduces the price.

This solution would increase the number of medical schools and other healthcare education facilities. Eventually, as the new professionals entered the market, the competition for patients would bring the desired results of lower prices, higher quality and greater coverage.

In an effort to cover all Americans, public clinics could be set up that offered basic healthcare regardless of ability to pay. These clinics could be administered by either the federal or state government. One way to staff these facilities would be for the federal government to offer medical students four years’ free tuition. In return, the students would work in the clinics for four years after graduation at a reduced salary.

One way to staff facilities would be to adapt the “military service for paid college tuition” program. The federal government offers medical students four years’ free tuition and in return, the students would work in the clinics for four years after graduation at a reduced salary.

This action coupled with Health Savings Accounts and less regulation of insurance companies marketing territories would allow consumers more control over how their healthcare dollars are spent. This is a market-based solution.


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The two most popular elements of Obamacare, pre-existing condition clauses and allowing a child to remain on the parent’s policy until they were 26 years old, can easily be retained.

Some may argue that the quality of care may suffer because there may not be enough qualified students who could become medical professional, however, today medical schools regularly turn applicants for a number of reasons that could include a lack of available space and needing to fill diversity quotas.

Simple economics tells us the answer to rising prices and shortages is always to increase the supply.

Admittedly the healthcare service market is different from other markets because in other markets if a consumer does not receive service, it is not a life or death situation. But still, the principles of economics apply. The increase supply solution should be the basis for a permanent fix.

Sometimes the solutions to problems are not as difficult as they seem.

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