We’ve all heard the ongoing news of healthcare reform and by now I think we’re all getting sick of it (no pun intended). Although there are many aspects to this issue, I would only like to mention one to keep it brief. If healthcare becomes socialized, it will kill competition in the industry. Competition is the driving force behind innovation and quality. Without it, firms will no longer be worried about losing business because they are guaranteed being paid. They will receive their annual salary regardless of how many lives they save, or how many diseases they cure. There is no incentive to excel or do better than the next doctor.
There are two examples that will help illustrate this point. The first comes from my brother. He graduated from the Air Force Academy and is now serving in the Air Force. Military personnel are given free healthcare from the healthcare institution on their respective bases. However, my brother has stated many times that he doesn’t even try to go there unless he’s “dying;” and on other occasions he’s said that if he ever did have a serious injury or illness he’d prefer going to a regular hospital. This is because the military doctors are paid on a biweekly basis rather than on performance. He said it creates an environment that “breeds mediocrity.”
The other example comes from one of my friends, who we will call Julie, hails from