How Expanded Government Regulation Can Harm Those Intended to be Helped and the Example of Health Care (download the PDF)
The 2010 health care reform (ObamaCare) was a high water mark in the pursuit of the Regulatory Illusion—the use of government agencies to regulate an industry through administrative discretion, mandates and controls for promised but elusive social ends. Instead we have mounting costs, elaborate bureaucracies, and no prospect of cost reduction except by cutting benefits and service. The regulatory illusion imagines an omniscient administrator who can allocate capital, improve decision-making and distribute benefits more fairly than markets and consumer choice can. This seductive approach promises a political free lunch, where public benefits are visible and costs are hidden by absorption into the private sector or the tax base. Repeated careful studies show how our health care system, single-payer systems, and various regulated industries fail us; the noble purposes of regulation are lost and patients, consumers, and taxpayers are harmed, leaving entrenched protected special interests to profit at our expense.
The solution in health care is to directly empower the individual instead of the employer or the government—for example using individual or family high-deductible health savings accounts, funded by the government for those who need it, and freeing up insurance markets from the regulatory one-size-fits-all straightjacket so competition for individual needs and preferences shape coverage and cost. This promotes patient satisfaction, creates true universal coverage, and real cost constraints.
The Author, Henry Field (Harvard BA, University of Chicago JD), is an independent scholar, author, and life-long student of law and economics. He writes on economics, law, and public policy. He is a life member of the American Law Institute.