“Repeal and replace” as a concept was always elegant, particularly as a campaign slogan. In practice, it is consistently proving itself to be harder than its proponents imagined. As with the AHCA before it, it appears that the Senate bill designed to repeal Obamacare is running smack into a moat of disparate GOP visions for what post-Obamacare healthcare should look like. Despite this, the bill seems startlingly unlikely to die, and for a simple reason: no Republican wants to be seen as the figure who kept Obamacare on the books through sheer intransigence. Furthermore, killing a major entitlement is a feather that the modern day GOP badly needs in its cap, and it is a necessary one if the party’s governing vision is going to have any meaning. If you want to fix the American healthcare system, then undoing Washington’s biggest step to socialize it is an absolutely necessary first step.
But while acknowledging this, let us not also lose sight of the fact that the Senate bill is only a first step, not the final one. Socialized medicine is a powerful threat to American healthcare, but it’s scarcely the only anti-market force that needs to be curbed if American healthcare is to be as good as it deserves to be. Yes, Obamacare is terrible, but the reason it is terrible is that it turns the federal government into an enforcer of trends that already exist in the pharmaceutical and insurance markets. The best example of this can be found in referring to the thing that arguably makes Obamacare most noxious: its attempt to force consumers to buy goods.
Witness a story last week from Stat News revealing that the by-now insanely well documented trend of pharmaceutical price hikes has taken an even worse turn. Specifically, pharmaceutical companies are not only hiking prices, but are now forcing those who need their drugs to buy more of the drugs than they need (or possibly can even afford). For instance, the article cites one pharmacist who was told by Jubilant DraxImage, a supplier of radiology medicines, that he would have to sign a contract agreeing to purchase a minimum amount of one of their medicines (that he didn’t even need) as a condition for purchasing their lung and kidney scan medicines. This after the same company had raised the prices of its drugs by as much as 1,800 percent in the past three years.
Let me say that again: If the Stat News story is to be believed, then despite charging 18 times as much for the same drug after three years, Jubilant DraxImage also forced people to buy completely unrelated products as a condition for even accessing their 18-times-pricier drug. Lawyers cited in the Stat News piece correctly identify this kind of practice as possibly violating U.S. antitrust law. And frankly, it should: this is the kind of abusive behavior that even pro-free market economists cite to teach their students the evils of monopolies.
Imagine that the federal government tried to push these kinds of rules on healthcare consumers generally: it would put practically every Obamacare nightmare scenario to shame. Senator Mike Lee’s (R-UT) famous thought experiment about the government forcing its citizens to buy broccoli would look quaint by comparison. Not to mention, the outcry from Republican legislators and their constituents would be deafening.
Which is why, while the repeal of Obamacare is necessary to stop one bullying source of centralized power from forcing unnecessary purchasing decisions on American citizens, it is not sufficient to fix the problem of bullying centralized monopoly power in the healthcare sector, period. Free market advocates should celebrate if the, by all accounts, mild remedy that is the Senate bill makes it through the upper chamber of Congress, and then through the House.
But they should on no account delude themselves into thinking that eradicating centralized planning from the healthcare market stops there. Corporate welfare-induced monopolies need to be managed and ideally broken up. Say, by tying the receipt of corporate welfare to pro-consumer conditions? Or by cracking down on anti-competitive practices by calling big business’ bluff. Either way, more work is to be done, and one only hopes that both houses of Congress will be equal to it over the next few years.
