rtIn a free market the price of goods and services are determined by supply and demand and tend to decrease due to competition. Why should the Health Care sector be different?
In the case of a heart attack, you’re talking about a unique demand but do not ignore the supply side. In a free market supply and demand tend to equal each other. Thus in the case of a heart attack you could still choose between different hospitals offering different services.
Let’s say the price to treat someone with a heart attack is indeed very high. In that case an entrepreneur might think that he could make a profit offering the service with a lower price. This is happening automatically all the time in the absence of government interventionism. In fact it works so well that we often do not recognize it!
Take mportillo14’s example with the farmer withholding food. Immediately another farmer comes along and drives the first one out of business before food becomes an ‘absolute necessity’.
You’re talking about the ‘Health Care’ sector. Isn’t it a coincidence that the sector with most government interventionism is one of the worst? Through licensing the government reduces the supply of physicians. Through third party payment the government artificially increases demand. Rising prices are the consequence. Half of the medical care costs in the US are payed by the government. If the government pays for your medical cost you aren’t interested in the price and hospitals can charge higher prices. Instead of eliminating the artificial demand, governments tend to cry for more money (more demand) driving the costs even higher.
The student loans crisis is very similar. Due to student loans, students have a higher purchasing power than without them. The universities react to this higher demand and raise their prices…