The healthcare industry is a textbook example of what Ivan Illich (in Tools for Conviviality) called a “radical monopoly.” The central function of the government’s “safety” and “consumer protection” regulations, in most cases, is either to exclude competing providers of a good or service from the market, to circumscribe the areas of competition between them, or to set a floor on the capitalization required for doing business and thus impose a mandatory minimum overhead. The overall effect, as Paul Goodman put it in People or Personnel, is to create a 300% or 400% markup in the cost of doing anything, and render us all dependent on institutional providers with bureaucratic cultures and high overhead costs. By mandating centralized, high-tech, and skill-intensive ways of doing things, the state makes it harder for ordinary people to translate their own skills and knowledge into use-value. Tollgates are erected between effort and consumption, so that it becomes harder to meet our subsistence needs through our own direct labor or through barter with other small producers outside the wage system. As a result, “decent poverty becomes impossible.”

For example, schooling becomes something you can only get from somebody with a degree from a teacher’s college, according to a state-prescribed curriculum. According to Illich in Deschooling Society, the first thing students learn at school is to confuse process with substance, and to view almost every form of consumption good imaginable as something properly provided by a professionalized institution. Self-treatment, self-education, etc., are things that only dangerously irresponsible people do. Back in the 1920s and 1930s, public school Home Ec curricula threw their weight behind the creation of mass consumer society, teaching students that home-baked bread, home-canned vegetables, and home-sewn clothing (in fact, pretty much homemade anything) was old-fashioned and grounds for suspicion by right-thinking people.

In the field of housing, around a third of which was still self-built in the U.S. as late as the 1940s, self-building is virtually illegal thanks to local housing codes set by licensed contractors and their lobbyists. This despite the fact that the available technology for self-building (modular houses, “cob” building, etc.) is far more user-friendly than it was sixty years ago.

And in healthcare, state intervention artificially skews the model of service toward the most expensive kind of treatment. For example, the patent system encourages an R&D effort focused mainly on tweaking existing drugs just enough to claim that they’re “new,” and justify getting a new patent on them (the so-called “me too” drugs). Most medical research is carried out in prestigious med schools, clinics and research hospitals whose boards of directors are also senior managers or directors of drug companies. And the average GP’s knowledge of new drugs comes from the Pfizer or Merck rep who drops by now and then.

The professional licensing cartels outlaw one of the most potent weapons against monopoly: product substitution. Right-wing libertarians are fond of using “food insurance” to illustrate the effect of third-party payment: if there were such a thing as grocery insurance, with low deductibles and a flat premium, people would be buying a lot more filet mignon and a lot less hamburger. The problem is that we’ve got a medical licensing system that criminalizes the sale of hamburger and mandates the sale of filet mignon. While healthcare consumers fall into many tiers of income, the state mandates only one tier of service regardless of ability to pay.

Much of what an MD does doesn’t actually require an MD’s level of training. Unfortunately, no matter how simple or straightforward the specific procedure you need done, you have to pay for an MD’s level of training. The medical, dental and other lobbies make sure that legislation is in place prohibiting advance practice nurses or dental hygienists from performing even the most basic services without the “supervision” of an MD or DD.

In an open-source healthcare system, someone might go to vocational school for accreditation as the equivalent of a Chinese “barefoot doctor.” He could set fractures and deal with other basic traumas, and diagnose the more obvious infectious diseases. He might listen to your cough, do a sputum culture and maybe a chest x-ray, and give you a round of zithro for your pneumonia. But you can’t purchase such services by themselves without paying the full cost of a college and med school education plus residency.

The government having made some aspects of treatment artificially lucrative with its patent system and licensing cartel, the standards of practice naturally gravitate toward where the money is. The newly patented “me too” drugs crowd out drugs that are almost (if not entirely) as good, so that the cost of medicine is many times higher than necessary. The licensing cartel requires diagnosis and treatment by someone with an MD’s level of training, when something much less might be all that’s needed.

Result: radical monopoly. The state-sponsored crowding-out makes other, cheaper (and often more appropriate) forms of treatment less usable, and renders cheaper (but adequate) treatments artificially scarce.

I’m very big on the idea of reviving the mutuals or sick-benefit societies that working people organized for themselves, back in the days before the state and the capitalist insurance companies conspired to destroy them. One small-scale attempt at doing this sort of thing is the Ithaca Health Fund, created by the same people involved in Ithaca Hours.

But such things alone are not enough. The problem with such systems is they handle only the financing end of things, while delivery of service is still under the control of the same old institutional culture. Any real solution will have to involve cooperative control over the provision of healthcare itself, as well.

Imagine, for example, a cooperative clinic at the neighborhood level. It might be staffed mainly with nurse-practitioners or the sort of “barefoot doctors” mentioned above. They could treat most traumas and ordinary infectious diseases themselves, with several neighborhood clinics together having an MD on retainer (under the old “lodge practice” which the medical associations stamped out in the early 20th century) for more serious referrals. They could rely entirely on generic drugs, at least when they were virtually as good as the patented “me too” stuff; possibly with the option to buy more expensive, non-covered stuff with your own money. Their standard of practice would focus much more heavily on preventive medicine, nutrition, etc., which would be cheap for members of the cooperative who didn’t have to pay the cost of an expensive office visit to an MD for such service. Their service model might look much more like something designed by, say, Dr. Andrew Weil. One of the terms of membership at standard rates might be signing a waiver of most expensive, legally-driven CYA testing. For members of such a cooperative, the cost of medical treatment in real dollars might be as low as it was several decades ago. No doubt many upper middle class people might prefer a healthcare plan with more frills, catastrophic care, etc. But for the 40 million or so who are presently uninsured, it’d be a pretty damned good deal.