The Problem of Insurance Monopolies
It must be remembered that one of the fundamental problems with monopolistic capitalism is that it can only survive as a plutocracy. Powerful insurance industry lobbies get laws passed to secure their monopolies. Even if they are not powerful enough to actually eliminate other insurance companies, they use their political influence to limit their competition and make it difficult for new competitors to enter the market. This is why the calls to allow insurance companies to compete across state lines ultimately won’t solve the problem of high insurance costs. Such laws are the antithesis of Distributism and create the environment where these large insurance companies can set high rates. This is what has happened within states and what would undoubtedly happen on a larger scale if competition were allowed across state lines. Distributism would revoke such laws in favor of ones that allowed, or even promoted, the establishment of more competitors. This would not only drive prices down on the basis of competitive supply and demand, but would also open the opportunity for the creation of more jobs.
The High Cost of Health Care
There are many factors that drive up the cost of health care. Ridiculous awards in medical cases, often against large institutions that are not actually responsible for what happened, further restrict the establishment of new competitors among the providers of medical care. Only very large organizations can survive such things. These awards also drive up medical costs because the insurance that medical practitioners and institutions need to get in order to protect themselves from these lawsuits is expensive and those costs get passed on to patients. Distributism’s answer to this is that the legal system needs to be reasonable. Cases against hospitals where the individual physician (not employed by that hospital) were clearly at fault need to be thrown out of court. Additionally, penalties applied must not be based on an emotional outcry caused by the incident, but on the ability of the penalty to discourage similar behavior or mistakes while not discouraging new entrants to the medical market. This is something that needs to be more fully explored.
Another factor is the lack of public awareness of the actual cost of medical treatment and of running particular services in a hospital. Emergency rooms lose money and that loss is absorbed by the other services provided by a hospital. There are also the losses brought on by providing care for those who cannot pay. Yes, it is true that private hospitals will currently turn away those who cannot pay, but the laws already in place only allow them to do so if the doctor says that it will not risk the life of the patient. I used to work for a private hospital and personally entered in the write-off of nearly a million dollars for a patient whose insurance had run out. That patient (the victim of an accident) remained there receiving the most expensive level of care until he passed away. Things like these are why getting two aspirin at a hospital can cost as much as a whole bottle at the store.
Let’s face it, we demand the best medical treatment in the world, but the best can cost the most. Expensive schooling, equipment, facilities, and research will always be factors in the cost health care. Distributism would allow doctors to form professional cooperatives to cut education costs and insurance to cover medical practice. It would also revoke laws that prevent or discourage more competitors providing each of these necessary things. That would help bring the cost of health care down, and consequently bring down the cost of health insurance.