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In Health Care Policy Discussions, We Continue to Ignore Reality:

 

The reality is that there are 300,000,000 Americans who all want to be healthy.  Most want to be healthier than they are now.  So the demand for health care is exceedingly high.

 

To become a competent physician takes natural gifts (high IQ, steady hands, etc.), years of training (and the bills for same), and the right personality (persistence, concern for others, etc.).  Consequently, the supply of competent health providers is quite limited (only about 600,000 in the U.S.).

 

Sky high demand and very limited supply results in high prices.  And this is unavoidable:  Price is only a rationing device.  If there isn't enough of something to go around, then somehow it must be rationed;  Somehow the decision must be made as to who gets some of that limited supply and who was too far back in line -- we ran out before we got to them.

 

In a market economy, that is based on who is able & willing to pay the most for the item.  Those who can't or won't pay discover that there wasn't any left for them.

 

Part of our blindness is that many forget (or never noticed) that the price of a thing may be (generally is) more than just money.  Part of the price for a college education is the four years+ that it takes out of your life.  Part of the price for your new car may be your old car - a trade-in.  Part of the "price" of keeping your job may be the hassle of putting up with your demanding & inconsiderate boss.  Part of it may be the necessity that you grovel a bit.  To get a thing, you may have to give up money, time, other assets, peace of mind, pride, honor, etc., etc., etc.

 

The best proposals for "fixing" U.S. health care will speak to reducing the demand for it -- e.g., wellness programs, early screening tests, doing something about our rampant obesity (fat tax, anyone?), etc.  It would also help to do things to increase the supply -- e.g., substituting nurse practitioners where that's appropriate, encouraging the in-migration of foreign doctors, still more subsidy for medical education & educators, etc.  Finally, it would help if we stopped wasting so much of the supply that we do have -- i.e., reducing the overkill of defensive medicine (which means doing something about the mal-practice crisis), and reducing the doctor's hours devoured in senseless paperwork.  (It boggles the mind that the insurance companies would rather be destroyed and replaced by a single government insuror than to standardize their forms!)

 

The more benign current policy proposals generally will only change the price composition -- perhaps less money, but more waiting and more hassle. 

 

Many of the current proposals will make the problem worse -- by increasing the demand for health care services and by discouraging the supply.  You can't bring 47,000,000 new patients on board and simultaneously stimulate demand among the rest of us by cutting prices without choking the system.  The current practices within Medicare and Medicade to limit reimbursements to doctors, hospitals, and pharmaceutical companies are reducing supply.  More and more foreign doctors are deciding that they can do as well -- perhaps can have a better life -- simply by staying in their homelands with their own people & culture.

 

More demand and less supply means still tighter rationing / higher "prices".  The cries to "Do something!" will only start to mute when we, the 85% who have good  health care, come to understand that providing good health care to the other 15% means, to some extent, taking it away from us.

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