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September 05, 2006


First of all, I really doubt this particular instance is going to work, since direct sales are already available.

This demonstrates that some people in the medical industry understand the theoretical potential of legal monopolies. But looking at the medical industry, I don't see doctors as very good at exploiting their monopoly. They make a lot of money and they're pretty good at restricting supply, but they're not capturing much of the money spent on health care. Most of it seems to be dissipated in bureaucracy and other inefficiencies.

It's possible that the waste is a biproduct of doctors incompetently trying to exploit their monopoly. I guess it's also possible that the doctors intentionally produce the waste so that their share is small and doesn't look so greedy. I really doubt this because if this were so, I'd think we'd see a lot of stories the WSJ one, of doctors who weren't so clever.

It seems to me that doctors try much harder to exploit their monopoly for a feeling of power than for money. The monopoly directly contributes to the waste, without anyone trying to use it, but I don't think it's the only problem.

I think the medical monopoly is much more about job security than anything else at this point. Wealthy though they may be, doctors have lost a lot of bargaining power to HMOs and insurance companies, who are the beneficiaries of many of these 'inefficiencies'. As a general rule, if inefficiencies persist without a good reason, someone's skimming the cream off the top.

National health insurance would actually save a lot of money. I know you libertarians don't like government but this is one of the things where it actually does a better job.

"National health insurance would actually save a lot of money. I know you libertarians don't like government but this is one of the things where it actually does a better job."

Yes, because a government monopolized bureacracy does so well in so many other things.

What would do a better job is removing most of the government interference that has crept in the last 40 years in the healthcare field, so that people have more real choices at reduced rates. And in the end you'll have people actually paying for what they use, which is much more efficient.

Allowing the sale of one's product through certain distributors only doesn't equate to preventing free market competition. It's done all over the place and it's perfectly legit. You can't buy a new Ford except through a Ford dealer.

I don't think insurance companies manage to extract much money. In particular, I don't think they're very profitable. Your general rule is simply wrong. It's quite plausible that no one is skimming off the wealth flowing through the insurance companies because it's simply being destroyed, say by rent-seeking. When you have to spend time to make your insurance company obey its contract, you are rent-seeking, but the creation of bureaucracy by the insurance company is also rent-seeking.

Socialized medicine does look much cheaper, but it's not clear to me that it would actually help. Perhaps it's not the socialized structure that makes European countries pay less, but path dependence or that they're poorer. But more important than the cost of medicine is the trajectory of the cost, and Europe also seems to have exponential growth (which is consistent with the theory that it's a function of wealth).
This is why I think it's psychological problem and not an economic one.

All businesses want to avoid competition. That's why it's so dangerous for the government to help do so.


You know if this involved a profession where people leaned Democratic, you'd be falling all over yourself to pin it on the Dems. As it stands, you didn't mention the Republicans once. Biased much?

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