Sometimes it helps to make sense of a complex issue to first deconstruct it into its component parts. Later, after you have (in the words of the philosophers) reduced it to its absurdities you can then reassemble it and consider how the different moving parts interact and get an idea of the full gestalt of the thing.

Delivering health care to the sick may appear a classic market situation. You have the buyers (patients) and the sellers (the doctors and their assorted aids and surrogates). However, there are some fundamental differences that make this unlike most markets.

First, the average instinct is for most people to not be too motivated to purchase medical services when they are healthy and feel fine. That’s why the young postpone it and the old are obsessed by it. But once you (or a loved one) is in pain or threatened with death the standard caution and skepticism of the consumer is quickly forgotten. You want medical attention and you want it NOW, and hang the cost. It is hard for a classical free market to operate under these circumstances. If you purchase an expensive item such as a house or an automobile you can anticipate the pleasure and utility you will get from it and you experience the inconvenience and discomfort of not having it. But you can still say “no” and wait for a better deal. If you seek a more useful metaphor than an economic transaction, think “extortion”. You become ready to pay out a lot of cash just to make the problem go away.

For this reason and many other valid ones we have developed insurance. It spreads the cost around along with the risk. We all know how it works. But with the high cost of today’s medical services it soon becomes more than just a convenience, it becomes a necessity. Only the very, very wealthy can seriously consider living without any. No matter how rich you are you can be bankrupted by a serious illness or injury which makes insurance something very different. Its what moves it from the “transaction” to the “extortion” category.

This makes health insurance a highly desirable commodity and this raises demand and cost. Now don’t get me wrong, the financial and administrative benefits of insurance are genuine and they are part of the legitimate business expenses of the medical industry. But the insurance provider, like any other businessman, will take advantage of a captive market and gouge his customers as much as he can. He provides nothing other than record keeping and loans, yet he supports a massive and very rich industry of—well, lets be perfectly honest–paper shuffling drones. And the money they collect in premiums is then invested in the stock market so they get to double-dip on everyone’s misery.

And it doesn’t stop there. Not content with making fortunes with computers and office buildings they further cut costs by coercing doctors, hospitals and patients to assume a great part of their responsibilities for them by doing a great deal of the record-keeping and filing and data transfers; which is why we pay the insurance providers in the first place. They take our money and we (and the doctors) still have to fill out forms and manage enormous piles of redundant paperwork. Ask any doctor, they spend most of their time doing administrative chores, and justifying their treatment, for insurance purposes, or in fulfilling government regulations designed primarily to protect us from crooked businesses. And if you spend a lot of time as a patient you have to keep on filling out that same goddam form over and over again. This is an activity that benefits the insurance providers and which is carried out totally at the expense of the patients and health care providers–and the government bureaucracies that oversee the whole mess. Sweet, eh?

And wait, there’s more! In order to maintain this profitable pyramid, they lobby the government so it is impossible to institute any other form of financing and administrative services that will even partially shut them out from this lucrative scam. That’s what this big national debate about medical care is really all about: keeping the insurance industry in health care at the maximum possible level of penetration. And as the UCMJ warns us; “Penetration, however slight, is sufficient to constitute an offense”.

The insurance industry is parasitic on the health care system, and it will do anything it takes to defend and extend that niche. And in fact, they go a step further; they make sure any government intervention in health care provides them with increased participation and profit. And the political Right, always the handmaid and bottle washer of the business community, does every thing they can to keep “private enterprise” in the loop when what we really have is a government-subsidized monopoly that serves and feeds some very rich companies. You could call it crony capitalism if you like, but really, is there any other kind?

There are only two ways to avoid this: fully socialized medicine, or no government participation in health care whatsoever.

A true free market solution, with no government intervention, and no regulation, would be extremely efficient. It would provide, through market mechanisms, a high quality medical service at reasonable prices. Unfortunately, it would also condemn a substantial proportion of the population (the poor) to absolutely no medical care at all. This solution may be attractive to some of us, but it is simply intolerable in any civilized society. We have a right to protection from sickness just like we have a right to protection from criminals and foreign invaders. Perhaps the government can’t solve the problem completely, but it must make an effort or it is no government at all.

Supply and demand DO interact, no one denies that there is a resonance there, but the result is not always the best possible product at the lowest possible price. What you really get is a product of quality most of us can tolerate, at a cost that most of us can afford (where “most” is the operative word) that ensures the highest possible profit. The equation is always solved for, and maximizes, profit.

Think about that. Isn’t that exactly what we have now?