Whatever the Supreme Court's Obamacare Ruling, Here's a Free Market Healthcare Solution - Forbes By Andrew Bernstein Regardless the Supreme Courtâ€™s ruling on Obamacare, the solution to Americaâ€™s healthcare problem is to establish a free market of medicine. Qualitatively, U.S. healthcare is the finest in the world. Evidence? Americans have a higher survival rate than any other country for thirteen of the sixteen most common cancers. Tens of thousands of international patients travel annually to the U.S. for medical care, including many from Canadaâ€™s system of socialized medicineâ€”not in the reverse direction. If death by motor vehicle accident is subtracted, the American life expectancy is the worldâ€™s highest. Half of the major new medicines introduced worldwide were developed by American companies. American researchersâ€”including Maurice Hilleman at Merck, who developed eight of the fourteen vaccines recommended for mumps, pandemic flu, hepatitis B, and othersâ€”played a key role in 80 percent of the most important medical advances of the prior thirty years. Etc. The problem is quantitativeâ€”its price has become prohibitively expensive. The cost of a hospital bed alone ranges from $1,000.00 to $1,500.00 per day. Nobel Laureate, Milton Friedman, wrote: â€œâ€¦spending on medical care went from 3 percent of the national income in 1919â€¦to a mind-boggling 17 percent (highest in the world by far) in 1997â€â€”and then continued to rise. For the past century, the U.S. has not had a capitalist system, but rather, a mixed economy, combining increasing elements of government intervention with decreasing commitment to individual rights and private property. Obamacare is but one example of the drift toward socialism. Which element of the U.S. mixed economyâ€”capitalism or socialismâ€”is responsible for the superb quality of its healthcare? Which element is responsible for its skyrocketing prices? Which principles are responsible for American innovations in pharmaceuticals, medical technology, and for overall excellence in healthcare? The same principles responsible for such American advances as the electric light, the telephone, the airplane, the computer, the Internet, the creation of film and music industries, and of a robust body of national literature: the principles of individual rights and free markets that liberate Americaâ€™s most creative minds to revolutionize every field. Capitalism is responsible for the superb quality of Americaâ€™s medical care. Why is its cost so high? Employers, often forced by the government to negotiate with labor unions, were pressured after World War II to provide health care benefits for many employees. By the 1960s, millions of American families were no longer paying out-of-pocket for most of their medical costs. Related: in 1965, Congress established the Medicare and Medicaid programs, to pay for the medical care of the elderly and poor respectively. Medicare and Medicaid, in conjunction with employer-provided health coverage, meant that a third-party payment system dominated the American medical field. Medical care had, in effect, become socialized. Most Americans had to pay but a modest fee for treatment. Medical care for tensâ€”if not hundredsâ€”of millions was virtually free. What does it do to demand for X if its price drastically falls? It will drastically rise. Milton Friedman explained the point succinctly: â€œthe lower the price, the greater the quantity demanded; at a zero price, the quantity demanded becomes infinite.â€ U.S. government intervention in the medical field has supercharged demand for medical services. Millions of persons with minor, self-healing ailmentsâ€”or with chronically untreatable onesâ€”who, if paying out of pocket, eschew treatment, now seek medical intervention. At the same time, state licensing boards restrict the number of physicians, excluding from medical practice competent (often foreign-trained) doctors. Governmental policy has immensely increased demand for medical services while simultaneously curtailing its supply. The inexorable result was the stupendous rise in the cost of American healthcare. Government interventionâ€”socialismâ€”is responsible for the astronomical cost of American healthcare. By contrast, look at the food industry. In this field, America has something much closer to a free market. For one, such innovative minds as George Washington Carver, Cyrus McCormick, John Deere, and many others have been free to revolutionize American agricultural science and technology, resulting in a stupendous supply of food. For another, most individuals are responsible for their own food expenses. The result is that demand is not governmentally supercharged, prices remain relatively stable and low, and an immense majority of Americans can afford adequate quantities of nutritious food. What would happen to demand for food if the government coerced employers to provide food payment for employeesâ€”and if the state instituted Foodcare and Foodaid for the elderly and the poor? In other words, what would happen to food prices if most peopleâ€™s food was bought by a third party? And, especially, what would happen if government policies simultaneously restricted supply? An individual, not the government, is responsible for his life. Neither food nor healthcare (nor any value) is a right. If possession of X is a rightâ€”at whose expense? One manâ€™s â€œrightâ€ to healthcare for which he cannot pay means that the government forces another man to pay for it. What, then, of the robbed manâ€™s rights? An individual has the right only to the healthcare for which he can pay or to which charitable personsâ€”including physiciansâ€”voluntarily contribute. The solution to our current problem is to expunge all government involvement in the medical field, thereby establishing a free market of medicine. Over a grace period of, say, ten years, gradually phase out Medicare and Medicaid, thereby providing time for dependent persons to take responsibility for their own medical expenses. Additionally, change the tax code: permit companies to pay employees, tax free, an amount identical to what they pay for each employeeâ€™s health care. Employees can then use the additional income to pay their own medical costs. The elimination of a third party payer system will result in diminishing demand for, and price of medical services. Most important, it will protect the moral principles of individual rights and personal responsibilityâ€”which enabled America to achieve its greatness in medical care and in numerous other fields. Andrew Bernstein is the author of The Capitalist Manifesto, Capitalism Unbound, and, most recently, Capitalist Solutions.