In the 60s there was radial keratotomy, performed with a tiny knife. Very expensive, and not without risk. Along came the laser, which was faster and less expensive. The risk was lessened, and the market grew quickly for this procedure.

Funny thing: Because this is an elective procedure, insurance doesn't cover it. The patient pays 100% out of pocket.

So, the more price decreased, the bigger the market grew. Economies of scale further brought cost (and price) under control. It's that crazy law of downward-sloping demand, which Krugman seems to dismiss, even though I learned it in Econ 101.

But separate price from cost, as occurs in any insurance plan, and the whole supply-demand relationship is corrupted.

The broad appeal of a communist health care system rests on one thing. Redistribution. That is still the "bottom line," as Prof Boudreaux has so aptly put it, for this issue, as for almost every other. And you will not put it to rest once and for all until you address that issue.

The ultimate question remains: does taking, whether health care or anything else, from rich to poor make the poor richer or poorer?

Perverse in that productive effort generates the resources that make health care available to people, while redistribution, by displacing productive effort, must negatively affect the availability of the resources that make health care available to people

http://www.eurothinkers.eu/2009/02/lorem-ipsum/

So to liberal trolls, the Euros are VERY concerned about their lack of innovation in the science area.

"Health care provision exhibits market failure."

How is this known?

"We have declared it so."

It is usually government interference, or simplistic economic analysis of externalities without understanding that affected parties will seek contractual and legal arrangements to protect themselves, that leads to the perception of a market failure.

You're saying that redistribution reduces society's total net income still leaves the assumption that it increases the poor's proportional share of it. And that still leaves the question: would they be better off with the larger proportional shares of the smaller cake or smaller proportional shares of the larger cake.

Mises said that the question was beyond economics. He missed the point.

It does not leave the poor with a larger but smaller proportional share of the smaller cake.

Can anyone direct me to research from an Austrian perspective on arrangements like this? In health care or in other sectors (eg. credit unions for financial services)?

The ultimate question remains: does taking, whether health care or anything else, from rich to poor make the poor richer or poorer?

The ultimate answer depends upon why the rich are rich and the poor are poor. In the Soviet Union, the rich were highly placed officials in the planning bureaucracy, while the poor were people subject to the Soviet Union with no loyalty to the Communist Party. Taking wealth from the one and transferring it to the other might have been useful.