market for health care

Milton Friedman argues that the government should not be involved in to health care market. Private sector should take full control. Market competition will drive the bad firms from the market. Good firms will stay. Good ending. But I disagree.

What I disagree is who will be willing to risk his life in this process. To find out who is bad, Someone has to be involved in the bad firms. By construction, he will not have good medical care, and as a result, suffers. What the possible outcomes are:

1. There are only a few medical providing firms that are able to establish thier reputations. New firms are hard to enter the market unless they charge sufficiently lower price to attract customers. This may lead to a naturel monopoly or oligopoly outcome. We need the government to handle that.

2. When new firm tries to enter the market, they have to charge low price, but under this oligopoly situation, it is highly likely those big firms may undercut the price whenever there is potential entry. This treat may prevent new firm at the beginning. We again need government to handle.

What I think is important is that the government should establish a min standard for qualification for the medical profession. Then develop a transparent system in rating from the users. It looks like many online sellers that they develop their reputation through customer ratings, but need to fullfil the min requirement outlined by the web platform.

I think in academica, it is natural to distinguish into the pro market or pro government camps. It is natural because this is the way to establish your stance. But in reality, we know both market and the government have important roles. It is a matter of under what situations.