For Profit Health Insurance Not Compatible With Real Life

May 15, 2010

Why has no nation on Earth ever had a successful private, for-profit, universal health insurance system?

The auto-repair industry serves its customers profitably in a free market for several reasons that do not apply to the health care industry:

1. The cost of an auto repair rarely exceeds 50% of the cost of acquiring an equivalent vehicle and is usually less than 5% of that cost.

The patient cannot acquire another body. The cost of an illness may exceed the combined cost of a buying a home and raising a family of university graduates.

2. Garages stay in business by making good decisions and providing good service.

Health care providers stay in business (retain their medical license) by conforming to industry standards. The health care industry (as opposed to the health care INSURANCE industry) does not want customers. They do not have to attract customers. There is no point in advertising for customers. The doctor regrets that the patient needs his help. The patient regrets being a patient.

3. Auto repair is based upon commodities: widely available parts, repair manuals, tools, and mechanics. Costs are well known and prices are regulated by competition

Health care equipment is highly technical and very expensive. Doctors are mostly specialists, often researchers with few students. They sometimes build their own equipment. The customer’s life may depend upon finding the right doctor. If that doctor does not have a contract with the patient’s private insurance company, the claim will be denied. (

4. All drivers can afford to drive – until they can’t. If too many drivers can’t afford to drive, some garages may suffer or fail. It’s tough on the ex-drivers and ex-garage owners, but that’s the free market.

Patients must be served whether they can afford to pay or not. If they cannot pay, the cost must be shifted to others.

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