Posted 2008-February-14, 14:11
There are things that are more effectively done by a monopoly than by the Free Market; and there are things that are better done by a regulated monopoly than by letting the Free Market control.
A good example of the first is something with a large initial infrastructure cost; power grid, water distribution, and so on. It is simply so much cheaper for the established company to provide the good or service that it is infeasible for a new competitor to arise; if there are two parallel distribution systems, it will still likely be cheaper for the consumer to buy out the other company and either use the parallel distribution for more capacity or shut one down and save on the maintenance costs.
The problem with a monopoly is they get to set prices to whatever profit margin they choose. If the good or service is optional, fine, so be it. If you want it, you pay whatever the market will bear. If you don't want it that much, also fine. But when it comes to services deemed essential by society, this no longer applies.
Water. Power. Sewer. Gas heating. Roads. Police and Fire services. Public Education. I'm sure you can think of others.
Some things it actually works best if the State is the monopoly; some things work best if the monopoly is regulated by the State. I will admit that "regulating profit" doesn't work so well, as there's no incentive to reduce costs, but other regulation systems can work. Please note that it is also very possible that a State-owned or State-regulated monopoly will actually be much less efficient than one facing competition; I do realize that the State often fails.
The current health distribution and insurance system in the United States is arguably one of those things that would work more efficiently as a monopoly. Think, at least, of the wasted time and money involved in redundant administration and marketing.
It is arguable that Basic health care is a necessary good as much as Police protection, power and water are. It is arguable that denying access to Basic health care is more costly to society than providing it, as well. If so, the "invisible hand of the market" will fail, as the consumer can't "just walk away". Even though there is competition, there is no incentive to offer a "lower price" to get customers to switch, as you just don't get enough more customers to gain back the loss of revenue from the rest.
If the health plan involves keeping the current system and simply supporting those who fall through the cracks currently, it will be horribly expensive and fail (but immensely profitable for health industry companies, especially insurance companies). If the health plan actually involves an solution to the current situation - where, remember, the cost to the government, never mind the privately insured, already significantly exceeds that of other developed countries with a public health system - then it will almost certainly be cheaper.
Oh, it'll never fly - there's too much money in the game. Between the hospitals, the doctors, the insurance companies, the pharmaceutical companies, and everybody else, nobody will be able to put through a system that doesn't protect the status quo. At which point, it'll cost massive taxpayer $$$, and be proof that the private sector does it better (when next the GOP get in).
And, of course, there are those who would disagree with some of my assumptions (the "it is arguable" statements). Many, if not most, are American. There's a reason I don't understand the conservatives (Democrats), never mind the ultra-way-far-right,-off-the-scale conservatives in the GOP.
When I go to sea, don't fear for me, Fear For The Storm -- Birdie and the Swansong (tSCoSI)