Why the free market doesn't provide quality health care as it does bread and lap dances

In America, if a high school Econ. class convinces the students that the free market rocks and communism is evil, kids pass and everybody's happy. Students must know that an invisible hand in free markets create a wonderful world of low prices and variety, and that communism takes away people's will to live, let alone produce anything.

This is true in the bread and lap dance markets (the latter was chosen to make these boring Econ. principles more accessible and sexy to some).

Paul Krugman, a Nobel prize winning economist, wrote an op-ed, in which he very unsexily used bread and TVs to explain why free market principles don't work in health care. He gives two reasons.

First, you don't know when or how you're going to use the health care you buy, but when you do it might be prohibitively expensive. That necessitates an insurance system and it means that someone will be making some kind of decision about the care you get. Nobody buys bread or lap dances to use at an unspecified time in the future and an unspecified manner. Imagine trying to do that! The bread or lap dance provider tries to give you the best possible product so that you'll buy it now, and possibly buy another loaf right after that. They make money if you buy the product on the spot. A health insurance provider makes more money if they can avoid giving you the care you need.

Plus, bread and lap dances range from 25 cents to 35 dollars depending on the location. Now that's expensive bread! But it doesn't compare to the price of triple bypass heart surgery.

Second, health care is really complicated. In teaching high school Econ. for a year, I learned that a functioning free market requires a public that is educated about it's choices. It's pretty simple to make choices about bread and lap dances as long as the providers are being honest about what you're getting! Health care consumers can't possibly know the ins and outs of the myriad possibilities with health care insurance. Many trust HMOs to make these decisions, but since they have some stake in saving money on your care, that often doesn't work out in your getting the best product.

Mr. Krugman doesn't conclude that single-payer or socialized medicine is the only way to provide excellent health care to a population, but he does conclude that there are no functioning examples of the free market doing so successfully.

This article in no way suggests that Mr. Krugman or I have ever purchased bread or lap dances, but I have often considered the economics of both.