Is Emergency Care a Failed Market?
From The Mises Institute
In response to my recent article on health-insurance mandates, I received many emails from readers who argued that mandates, as unappealing as they may be, are necessary to prevent market failure in emergency medical services.
Specifically, they argued that there is a “free-rider problem” in emergency care because individuals are currently able to visit the emergency room (ER) without insurance or the means to pay, receive care, and then skip out on the bill. Such free riders force the hospital to either accept the losses or spread the costs to other patients. Therefore, the readers reasoned, there is a market failure in that health insurance is under-demanded and ER care is over-demanded, increasing health care costs and dumping them onto those consumers who do purchase insurance and pay for their visits.
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