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Guide to Other Internet Resources on Price Controls in Health Care
Dear President Clinton and All Members of Congress:
For thousands of years, governments have tried to control prices. The universal experience has been that price controls produce shortages, black markets, reduced quality, and economic hardship.
Now, once again, programs to control health care prices are on the policy agenda. Under the guise of controlling Medicare costs and shielding the elderly from "unfair" prescription-drug prices, current proposals would restrict discounts on drug prices, cap health care spending, and limit insurance premiums. Among those adversely affected would be hospitals, members of managed care organizations, public health clinics, and government programs such as Medicaid and the Veterans Health System, which, because of their mass-buying power, are able to negotiate favorable drug prices for patients.
In countries with price controls, health care services are severely rationed. Patients wait months and sometimes years for surgery, suffering significant harm to health, even death, as a result. Government bureaucrats, rather than doctors or patients, select treatments. Pharmaceutical innovation languishes. In recent decades, American health care firms have created hundreds of new drugs, devices, and other medical products that have saved millions of lives, not only in the United States but around the world. The best way to save millions more is to enhance the incentives to research, develop, and market new health care products. Existing price controls and other trade restrictions affecting health care goods and services should be removed in order to encourage dynamic entrepreneurship in competitive markets. The result will be lower prices, greater innovation and higher quality.
Despite claims to the contrary, price controls do not reduce medical costs. Nor do they call forth improved health care services. Instead, they produce lower-quality medical care, reduced innovation, and costly new bureaucracies to monitor compliance, adding to the burdens of health care providers already entangled in red tape. Price controls harm consumers of medical services, especially those most in need of health care services.
We urge you to oppose all forms of price controls in any health care reform.
539 economists and other scholars from all fifty states and the District of Columbia
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- James C. Miller, III, Citizens for a Sound Economy
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- David J. Schmidtz, University of Arizona
- Mark Schniepp, Center for Regional Economic Growth
- Anna J. Schwartz, National Bureau of Economic Research
- Robert H. Scott, California State University, Chico
- Gerald W. Scully, University of Texas, Dallas
- Larry J. Sechrest, Sul Ross State University
- Richard T. Selden, University of Virginia
- Barry J. Seldon, University of Texas, Dallas
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- Sol S. Shalit, University of Wisconsin, Milwaukee
- Dennis G. Shea, Pennsylvania State University
- Judy Shelton, Empower America
- George B. Shepherd, Emory University
- Stephen Shmanske, California State University, Hayward
- Mark H. Showalter, Brigham Young University
- William F. Shughart II, University of Mississippi
- Barry N. Siegel, University of Oregon
- Keith Sill, Federal Reserve Bank of Philadelphia
- Randy T. Simmons, Utah State University
- Gene R. Simonson, California State University, Long Beach
- Neil T. Skaggs, Illinois State University
- Mark Skousen, Rollins College
- Gene Smiley, Marquette University
- Rodney T. Smith, Stratecon Inc.
- T. Alexander Smith, University of Tennessee
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- Courtenay C. Stone, Ball State University
- W. Craig Stubblebine, Claremont McKenna College
- Ryan M. Sullivan, Economic Analysis, LLC
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- Shirley V. Svorny, California State University, Northridge
- Charles Swanson, Temple University
- Richard J. Sweeney, Georgetown University
- Richard E. Sylla, New York University
- Alexander T. Tabarrok, The Independent Institute
- Thomas C. Taylor, Wake Forest University
- Timothy D. Terrell, Liberty University
- David J. Theroux, The Independent Institute
- Clifford F. Thies, Shenandoah University
- Henry Thompson, Auburn University
- Mark Thornton, Auburn University
- Richard H. Timberlake, Jr., University of Georgia
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- Mark Toma, University of Kentucky
- Edward Tower, Duke University
- George W. Trivoli, Jacksonville State University
- George Troughton, California State University, Chico
- Leo Troy, Rutgers University
- Gordon Tullock, George Mason University
- Charlotte Twight, Boise State University
- Jon G. Udell, University of Wisconsin
- Michelle A. Vachris, Christopher Newport University
- James Van Beek, Blinn College
- T. Norman Van Cott, Ball State University
- Hendrik F. van den Berg, University of Nebraska
- Karen I. Vaughn, George Mason University
- Richard K. Vedder, Ohio University
- Randal J. Verbrugge, Virginia Tech University
- John M. Vernon, Duke University
- Harry C. Veryser, Walsh College
- Ronald J. Vogel, University of Arizona
- Richard E. Wagner, George Mason University
- Deborah L. Walker, Loyola University New Orleans
- Stephen J. K. Walters, Loyola College in Maryland
- Alan Rufus Waters, California State University, Fresno
- Myles J. Watts, Montana State University
- Carolyn L. Weaver, American Enterprise Institute
- Lawrence H. White, University of Georgia
- Murray L. Weidenbaum, Washington University
- Marc Weidenmier, Claremont McKenna College
- Roman L. Weil, University of Chicago
- David L. Weimer, University of Rochester
- Ivo I. Welch, University of California, Los Angeles
- Robert O. Welk, Row Tek Economics
- John T. Wenders, University of Idaho
- Walter J. Wessels, North Carolina State University
- Robert Whaples, Wake Forest University
- James B. Whisker, West Virginia University
- Richard William Wilcke, University of Louisville
- Arlington W. Williams, Indiana University
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- Paul W. Wilson, University of Texas
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- Larry T. Wimmer, Brigham Young University
- Mark P. Witte, Northwestern University
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- Charles Wolf, Jr.,
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- Christopher T. Wonnell, University of San Diego
- William C. Wood, James Madison University
- Jeffrey Wrase, Federal Reserve Bank of Philadelphia
- Gene C. Wunder, Washburn University
- Thomas L. Wyrick, Southwest Missouri State University
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- DeVon L. Yoho, Ball State University
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- Andrew M. Yuengert, Pepperdine University
- Edward E. Zajac, University of Arizona
- Paul J. Zak, Claremont Graduate School
- Mokhlis Zaki, Northern Michigan University
- Asghar Zardkoohi, Texas A & M University
- Steve Ziliak, Bowling Green State University
- Michael Zimmer, University of Evansville
- Louis H. Zincone, Jr., East Carolina University
- Thomas S. Zorn, University of Nebraska
- Benjamin Zycher, Cato Institute
Co-Sponsors of the Open Letter on Health Care Policy Reform
- Association of American Physicians and Surgeons
- Cancer Research Institute
- Hispanic Business Roundtable
- Independent Womens Forum
- International Patient Advocacy Association
- Liberty AIDS Education Foundation
- National Kidney Cancer Association
- National Taxpayers Union
- Non-Commissioned Officers Association of the U.S.A.
- Small Business Survival Committee
- United Seniors Association
Please contact The Independent Institute for further information, including details on the new book, American Health Care