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issues caused by high costs of health care, additional costs on employers, as well as the connection between high costs of health care and diminishing access for persons who require health services.
Experts provide numerous explanations for the high and rising costs of health care. These include perspectives such as that the high costs emanate from external forces, the weakness of competitive health care markets in the health care system, excessive costs of health system administration, from undue market power of providers and the absence of robust cost-containment strategies (Keeler, Melnick and Zwanziger 73). However, it is apparent that the greatest basis of high and increasing health care prices is the lack of a free health care market system in the US. This paper will provide a comprehensive argument showing why such absence is the main cause of the current high cost in the US. Health care costs can be reduced significantly through the introduction of a free market.
Within a free and competitive market, forces of supply and demand determine the price of commodities. This means that there are so many customers and suppliers that no single seller or buyer can dictate the price of a commodity or service, and all buyers are fully privy to adequate information to make sensible buying decisions. The health care sector consists of several markets that include patients getting physical and hospital services, employers selecting the best health care plans for their employees and health insurance organizations entering contracts with hospitals. At the level of patients seeking hospital services, free market means that patients would not only be responsible for certain costs, but will also have ample information on the prices of various providers and obtain low-priced services (Luft and Grumbach 78). At such a level, hospitals and physicians would have to lower their charges to attract customers (patients). In reality, however, patients do not buy hospital and
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