Capitalism Is Awesome, Unless You Get Sick

This article is meant to explain some principles of a free market economy, and how in general, they are beneficial for consumers. In addition, it is meant to show the problems that arise when health care is provided by a private business in a free market economy.

Capitalism is an excellent tool to give us the goods and services that we want and need. Because we are free to spend our money as we choose, companies must provide goods and services that the public wants. A company's desire to profit and their concern for their own wellbeing is an excellent incentive for them to provide the products that we value most.

Capitalism also rations goods and services through the principle of supply and demand. This is a good thing because it allows individuals to buy what is most important to them. Let's say Apple makes 500,000 iPods a year. Because it's such a neat little gizmo, almost every American is going to want one. In a socialist system, that would mean that a few lucky people get them, while the rest of us are crap out of luck. In a capitalist system, Apple can raise the price of an iPod, thereby lowering the demand until it is equal to their supply. If an iPod costs about $200, not everyone is going to want to buy one. But, the people who want one enough to pay $200 dollars for it will be able to get one. Meanwhile, my buddy who thinks they're kind of cool, but not cool enough to pay $200 for, can spend his money on something else he would rather spend $200 on.

Apple can exploit the fact that some people value the iPod more than others to make even more money. At $200 dollars each, Apple could sell every iPod it makes. However, there are many individuals that value the iPod so much that they would pay far more for it. This gives Apple an incentive to raise the price, let's say to $250. Apple isn't selling everything it could produce, but the extra money they get from each iPod sale more than makes up for that loss.

However, there is a risk that they could set the price too high. If Apple sells an iPod for $400, they would make a killing on each sale, but few people would be willing to pay that price. decreasing their overall profits. This forces Apple to do a sort of balancing act: finding the price that most people will pay, but not pricing the iPod so high that no one will want to buy one. For consumers, this isn't a bad thing. Because Apple makes the iPod unavailable to those that will pay the least for it, those that are willing to pay more will be able to get one.

This balancing act is true of any organization whose main goal is to turn a profit. To maximize profits, you must charge more than some people can pay in order to get more money from those who are willing to pay more.

When health care or health insurance is run by a for profit organization, this becomes a huge problem. An insurance company must exclude those who are willing to pay the least to be competitive. The people they exclude are normally poor people who can't afford to pay for insurance. This puts the poor of our country in a terrible position. Imagine that every time you got sick, you had to decide whether or not going to the doctor was more important than paying your rent on time. Imagine feeling chest pain, and having to decide how likely it is you are having a heart attack, and whether it is worth the risk  to pay a hospital to check you out for something that could be nothing. It sucks, and it's immoral to force our citizens to make that choice.

It's also bad for the economy. If I can't afford to get checked out for my chest pain, I might wait until I know I'm having a heart attack. The hospital is obligated to treat me, regardless of my ability to pay. Tax payers will end up paying huge amounts of money for drugs, and possibly surgery, when a regular check up and blood pressure medication could have stopped me from ever having a heart attack. Now, unable to work, I am no longer contributing to the economy.

But that cost goes to the taxpayers, not the insurance companies, so they're fine. In fact, if I wanted to get insurance after the heart attack, I probably couldn't. It's bad business to insure people who really need it..After all, they might get sick. As long as health insurance is a private, competitive business, insurance companies are compelled to do their best to avoid covering people who need health care.

Are we really willing to allow so many American citizens to suffer and die because we believe healthy people will be able to save a dollar or two? Do we really need to pay hundred million dollar salaries to CEOs of health insurance companies? Do we really need to pay billions of dollars for health insurance advertising?