The Market is the Cure for Europe’s Health Systems
Not even Germany’s great success in hosting the recently concluded World Cup competition could shield Angela Merkel’s government from the wrath of the German public for its disappointing healthcare reform proposals. Such is the urgency of healthcare reform in Germany today that her government’s poll numbers dropped to new lows even as World Cup football boosted Germany’s image in the international community to new highs.
Of course, Germany is not the only country in the world facing healthcare costs that are unnecessarily escalating unnecessarily because of over-stimulated demand and inadequate competition on the supply side. This is a problem in the United States as well as throughout Europe.
Various insurance schemes and government subsidies over-stimulate demand for medical services by making the price to consumers artificially low. Because this prices understates the true cost of medical services to the economy, people buy more than the economy can afford to supply. The result is too much pressure on healthcare resources, causing healthcare costs to escalate.