Why health care should not be subject to the laws of supply and demand

When Doctors Opt Out - WSJ.com

When Doctors Opt Out
We already know what government-run health care looks like.
By MARC SIEGEL

Here's something that has gotten lost in the drive to institute universal health insurance: Health insurance doesn't automatically lead to health care. And with more and more doctors dropping out of one insurance plan or another, especially government plans, there is no guarantee that you will be able to see a physician no matter what coverage you have.

Consider that the Medicare Payment Advisory Commission reported in 2008 that 28% of Medicare beneficiaries looking for a primary care physician had trouble finding one, up from 24% the year before. The reasons are clear: A 2008 survey by the Texas Medical Association, for example, found that only 38% of primary-care doctors in Texas took new Medicare patients. The statistics are similar in New York state, where I practice medicine.

More and more of my fellow doctors are turning away Medicare patients because of the diminished reimbursements and the growing delay in payments. I've had several new Medicare patients come to my office in the last few months with multiple diseases and long lists of medications simply because their longtime provider -- who they liked -- abruptly stopped taking Medicare. One of the top mammographers in New York City works in my office building, but she no longer accepts Medicare and charges patients more than $300 cash for each procedure. I continue to send my elderly women patients downstairs for the test because she is so good, but no one is happy about paying.

The problem is even worse with Medicaid. A 2005 Community Tracking Physician survey showed that only 50% of physicians accept this insurance. I am now one of the ones who doesn't take it. I realized a few years ago that it wasn't worth the money to file the paperwork for the $25 or less that I received for an office visit. HMOs are problematic as well. Recent surveys from New York show a 10% yearly dropout rate from the state's largest HMO, the Health Insurance Plan of New York (HIP), and a 14% drop-out rate from Health Net of New York, another big HMO.

The dropout rate is less at major medical centers such as New York University's Langone Medical Center where I work, or Mount Sinai Medical Center, because larger physician networks have more leverage when choosing health plans. Still, I am frequently hamstrung as I try to find a good surgeon or specialist to refer one of my patients to....
 
I contend that the provision of health care is not something which should be influenced by the economic laws of supply and demand but instead should be provided on the basis of need.

Everything is distributed based on the laws of supply and demand.

Healthcare is no different, regardless of whether healthcare is distributed and funded by the government or the private sector. The only differences between the two are the outcomes.
 
I agree Diuretic, I don't think health care fits with the rules of supply and demand...this is why our healthcare costs have been rising double digits, each year for the last decade....as well, imo.

Healthcare costs have been rising by about 8% per year, give or take a few percent, for the past 40 years. This is true in virtually every nation in the developed world.

To make up for shortfalls, rationing occurs. The only difference between America and all the other countries is that in America, some get far less whereas in the other countries, most get somewhat less.

The increases in healthcare have been primarily due to the costs of new treatments. We live longer and the treatments are better than they were in the past. One option to lower costs is to not implement the new treatments, which means we would have shorter lives and worse service. However, people want longer lives and better services, so we pay more.
 
PC

NO, capitalism and health care are like oil and water....it may work fine for the oil on top, but those that are the water underneath just drown.

true capitalism or pure capitalism or free trade capitalism will never work when it comes to saving a person's life that is at stake....

capitalism relies on individual coveting...desiring what others have....cell phone, nike, digital camera, computer, designer clothes, blackberry, car, home, yard etc....

it is rampant with greed, usery, fraud, and self grandeur as well....

i personally do not trust this beloved capitalistic system with many flaws, with my life or my child's life or health.

there are too many quid pro quos between industry and our congress/government to be anything but unfair imo.

capitalism may work well with ''things'' that are unnecessary, with ''things'' that one may ''want'' but it in no way is a devised economic system that can deal with a necessity, needed by all at one time or another, in order to stay healthy or alive.

doctors take an oath to heal....for several thousand years now PC....they DO NOT TAKE AN OATH to minister medicine only if they get paid or get rich off of it.

certainly the pharma industry should make a profit, but off of our backs with funding their research and development and off only American's backs in the much higher prices they charge us compared to every single country in the world they provide their drugs to....

if you call this capitalism working well with our health care system....then i don't know what else to say to you PC?

care
 
I agree Diuretic, I don't think health care fits with the rules of supply and demand...this is why our healthcare costs have been rising double digits, each year for the last decade....as well, imo.

Healthcare costs have been rising by about 8% per year, give or take a few percent, for the past 40 years. This is true in virtually every nation in the developed world.

To make up for shortfalls, rationing occurs. The only difference between America and all the other countries is that in America, some get far less whereas in the other countries, most get somewhat less.

The increases in healthcare have been primarily due to the costs of new treatments. We live longer and the treatments are better than they were in the past. One option to lower costs is to not implement the new treatments, which means we would have shorter lives and worse service. However, people want longer lives and better services, so we pay more.
if this were true capitalism, all we would need is to increase the supply of doctors and hospitals and then the cost would come down for the consumer...those demanding the product or service....

in other words, more competition...more doctors, more hospitals, more services rendered, the cost of prorating the newer equipment or newer technology among more people, reduces the price per person....

BUT THIS JUST HASN'T HAPPENED....whether it is because health care is a life necessity not a WIDGET, not a THING or because our government reps have been paid off by the various health care industry to limit hospitals and doctors to only a few big guns through various legislation....who knows?
 
I agree Diuretic, I don't think health care fits with the rules of supply and demand...this is why our healthcare costs have been rising double digits, each year for the last decade....as well, imo.

Healthcare costs have been rising by about 8% per year, give or take a few percent, for the past 40 years. This is true in virtually every nation in the developed world.

To make up for shortfalls, rationing occurs. The only difference between America and all the other countries is that in America, some get far less whereas in the other countries, most get somewhat less.

The increases in healthcare have been primarily due to the costs of new treatments. We live longer and the treatments are better than they were in the past. One option to lower costs is to not implement the new treatments, which means we would have shorter lives and worse service. However, people want longer lives and better services, so we pay more.
if this were true capitalism, all we would need is to increase the supply of doctors and hospitals and then the cost would come down for the consumer...those demanding the product or service....

in other words, more competition...more doctors, more hospitals, more services rendered, the cost of prorating the newer equipment or newer technology among more people, reduces the price per person....

BUT THIS JUST HASN'T HAPPENED....whether it is because health care is a life necessity not a WIDGET, not a THING or because our government reps have been paid off by the various health care industry to limit hospitals and doctors to only a few big guns through various legislation....who knows?

Care did you read what I posted? Docs are opting out, it's too time consuming and expensive. They are burning out and that's WITHOUT everyone being in the 'public sector.'
 
if this were true capitalism, all we would need is to increase the supply of doctors and hospitals and then the cost would come down for the consumer...those demanding the product or service....

in other words, more competition...more doctors, more hospitals, more services rendered, the cost of prorating the newer equipment or newer technology among more people, reduces the price per person....

BUT THIS JUST HASN'T HAPPENED....whether it is because health care is a life necessity not a WIDGET, not a THING or because our government reps have been paid off by the various health care industry to limit hospitals and doctors to only a few big guns through various legislation....who knows?

Not really.

Think about it this way. The same computer chip 20 years ago costs about 0.01% now what it did back then. That is because processes have improved dramatically, lowering the cost of chips. If we used the same computing power as we did 20 years ago, then a computer today would cost about $50.

Similarly, if we held our life expectancy constant and accepted a lower quality of life, then the costs of healthcare would have declined dramatically because most of the treatments we undertook then are far cheaper today.

However, people demand ever increasing computer power and ever increasing lives. The cost of a computer is roughly about the same, perhaps a little cheaper than it was two decades ago, but the power of a computer has exploded exponentially. Computing technology is highly scalable, and costs fall at a dramatic rate.

For healthcare, costs have risen because the costs of increasing people's lives are not as scalable as the computing industry, for a variety of reasons. Thus, that incremental increase in life spans and better care grows at a faster rate than the economy in general because we cannot collapse the cost structure of healthcare like we can for computing power.

Yes, certain changes in the distribution system has increased costs, such as the conversion of non-profit hospitals to for profit. However, the primary driver of increasing healthcare costs is this shift in the demand curve outward, which more than offsets the downward shift in the supply curve. Or, in English, demand outstrips the decreases in costs.
 
Healthcare costs have been rising by about 8% per year, give or take a few percent, for the past 40 years. This is true in virtually every nation in the developed world.

To make up for shortfalls, rationing occurs. The only difference between America and all the other countries is that in America, some get far less whereas in the other countries, most get somewhat less.

The increases in healthcare have been primarily due to the costs of new treatments. We live longer and the treatments are better than they were in the past. One option to lower costs is to not implement the new treatments, which means we would have shorter lives and worse service. However, people want longer lives and better services, so we pay more.
if this were true capitalism, all we would need is to increase the supply of doctors and hospitals and then the cost would come down for the consumer...those demanding the product or service....

in other words, more competition...more doctors, more hospitals, more services rendered, the cost of prorating the newer equipment or newer technology among more people, reduces the price per person....

BUT THIS JUST HASN'T HAPPENED....whether it is because health care is a life necessity not a WIDGET, not a THING or because our government reps have been paid off by the various health care industry to limit hospitals and doctors to only a few big guns through various legislation....who knows?

Care did you read what I posted? Docs are opting out, it's too time consuming and expensive. They are burning out and that's WITHOUT everyone being in the 'public sector.'

I went back and just read it....

I can't begin to think that I have the "right'' or ''perfect" answer to our very high health care costs or who should pay for it....I have never been a fan of Universal Health care, because I have felt it would be just a gift horse to the 6o% or so, of businesses that share the cost or provide it for their employees now as a benefit and also because I haven't seen a universal plan proposal from anyone that seems feasible. or that really would address the rising costs of health care in a meaningful manner that would prevent our government from literally going bankrupt if a universal plan was instituted....especially one that involves insurance companies as the middle man pocketing a third of the health care industry's money made when all is said and done, without providing or paying for one iota of research and development or one iota of a medical doctor's very expensive required schooling in order to be licensed....or paying for one MRI or CAT scan machine.... this seems like a waste of money for just paper pushers....

Obama's suggestion of streamlining the paperwork could help with this problem of doctors opting out, to some degree, since the complication and wastefulness of such is merely not worth it....

maybe this savings can be spent on paying more for medicare patient procedures or doctors visits?

I just don't have the answer to any of this honestly....I know it needs some well thought out with all forseeable consequences, both good and bad, for every idea out there to correct it, before we should make any moves at all...in my humble opinion.

if we make no changes, our government will be broke in a decade or two, by this and our debt payments due. :eek:
 
if this were true capitalism, all we would need is to increase the supply of doctors and hospitals and then the cost would come down for the consumer...those demanding the product or service....

in other words, more competition...more doctors, more hospitals, more services rendered, the cost of prorating the newer equipment or newer technology among more people, reduces the price per person....

BUT THIS JUST HASN'T HAPPENED....whether it is because health care is a life necessity not a WIDGET, not a THING or because our government reps have been paid off by the various health care industry to limit hospitals and doctors to only a few big guns through various legislation....who knows?

Let's take the last first. "...because health care is a life necessity not a WIDGET, not a THING or because our government reps have been paid off by the various health care industry to limit hospitals and doctors ..."

reductio ad absurdum is a debating technique designed to show the weakness of an argumenet by carrying it to an extreme degree. This is effective only with folks who can see that their example takes them beyond where they intended. This clearly would not work with you, but I might have fun merely giving the example.

If Care4all didn't have any food, she would cease to exist. Therefore food " is a life necessity." Care belives that since no government official is coming to her abode and serving her her "lifes necessity," then "our government reps have been paid off by the various " restaurant industry honchos! Clear?

Ah, the lazy, self-serving, socialst, solipsistic thinking.

You have the right to life, liberty and the pursuit of happiness. Happines, health care, and dinner not guaranteed.

"...all we would need is to increase the supply of doctors and hospitals ..." If if's and but's were candy and nuts, we'd all have a Merry Christmas.

How many years would you spend in school so that the Care's of the world would get their candy and nuts? Where's the payoff for the doctors and researchers? Your 'thanks'? Care, come wash my car and I'll say thanks.

I love being on this board so that I'm no longer astounded when a seeming adult propounds this kind of thinking.

On the off chance that any of this got through to you, consider my original post which attempted to show a) how much in debt the government is in trying to give you your candy and nuts, b) how much worse it will be when the baby boomers retire, and c) offer an alternative based on the idea that new workers could be trusted to make better health care decisions if it were their own funds they were spending, and if doctors were allowed to become free market entrepreneurs.

Allow me to repeat one example from that post:
Cosmetic surgery behaves like a real market. It is not covered by insurance, consumers compare prices and services, and doctors act as entrepreneurs. Over the last 15 years, the real price of cosmetic surgery has gone down, even though the number of people getting cosmetic surgery five- or six-fold.

While my post does not come close to answering all of the problems with the system it is eminently more sage than your "the government owes me health care, and the medical profession should service me for ...free."
 
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if this were true capitalism, all we would need is to increase the supply of doctors and hospitals and then the cost would come down for the consumer...those demanding the product or service....

in other words, more competition...more doctors, more hospitals, more services rendered, the cost of prorating the newer equipment or newer technology among more people, reduces the price per person....

BUT THIS JUST HASN'T HAPPENED....whether it is because health care is a life necessity not a WIDGET, not a THING or because our government reps have been paid off by the various health care industry to limit hospitals and doctors to only a few big guns through various legislation....who knows?

Let's take the last first. "...because health care is a life necessity not a WIDGET, not a THING or because our government reps have been paid off by the various health care industry to limit hospitals and doctors ..."

reductio ad absurdum is a debating technique designed to show the weakness of an argumenet by carrying it to an extreme degree. This is effective only with folks who can see that their example takes them beyond where they intended. This clearly would not work with you, but I might have fun merely giving the example.

If Care4all didn't have any food, she would cease to exist. Therefore food " is a life necessity." Care belives that since no government official is coming to her abode and serving her her "lifes necessity," then "our government reps have been paid off by the various " restaurant industry honchos! Clear?

Ah, the lazy, self-serving, socialst, solipsistic thinking.

Only in a FAR RIGHT WINGER'S mind my dear PC.

I never said the government had to give me a thing, let alone food and I have never ever been lazy....nor has any democratic friend or family member in my immediate circle so implying such pc, is nothing but a foolish distraction from what i have said, and i suppose a lazy answer on your part, only meant to deflect from responding to what I actually had said? those kind of things don't work on me...as you noted...



You have the right to life, liberty and the pursuit of happiness. Happines, health care, and dinner not guaranteed.

They are inalienable rights aren't they PC? What does that mean to you?

"...all we would need is to increase the supply of doctors and hospitals ..." If if's and but's were candy and nuts, we'd all have a Merry Christmas.

those are the "laws" of capitalism PC....those are part of the guiding rules of capitalism...do you think they are not? Do you think that supply vs demand has nothing to do with capitalism? Looks like the nuts and candy are for you to eat.... ;)

How many years would you spend in school so that the Care's of the world would get their candy and nuts? Where's the payoff for the doctors and researchers? Your 'thanks'? Care, come wash my car and I'll say thanks.

You are missing the ability to think outside of the box for any solutions PC and this is conservatism, I suppose....? Are you so set in your ways of thinking that you can't see around what you want to believe? or that you are not opened minded on things like cutting out the middle man, so to give the doctors and hospitals paying for the new machinery the money instead of a private insurer who does nothing but push paper?

Can you not see the savings in passing on the research and development fees on to EVERYONE in every country that benefits from the pharmascuticals instead of putting ALL OF THIS on to the Shoulders of Americans only, which could also in turn reduce healthcare costs without having to lower the hospital's or doctor's income?

Are you so indifferent to the idea that Pharma paid off our congress to keep us from being able to negotiate for a bulk discount on senior's meds or buy them from Canada to save money? Do you really think our congressmen thought this all up on their own? You are smarter than what you are implying in this post of yours pc...I know you are...!!! Please don't conveniently play the "dumb blonde" with me, because it simply won't work...I know you got the smarts that go beyond what you posted!



I love being on this board so that I'm no longer astounded when a seeming adult propounds this kind of thinking.

Nor am I astounded by your kind of thinking and tactics....anyone can play dumb if they feel like it, I suppose....I just didn't expect it from you!

On the off chance that any of this got through to you, consider my original post which attempted to show a) how much in debt the government is in trying to give you your candy and nuts, b) how much worse it will be when the baby boomers retire, and c) offer an alternative based on the idea that new workers could be trusted to make better health care decisions if it were their own funds they were spending, and if doctors were allowed to become free market entrepreneurs.


Allow me to repeat one example from that post:
Cosmetic surgery behaves like a real market. It is not covered by insurance, consumers compare prices and services, and doctors act as entrepreneurs. Over the last 15 years, the real price of cosmetic surgery has gone down, even though the number of people getting cosmetic surgery five- or six-fold.

Cosmetic surgery IS NOT FOR ONES HEALTH OR LIFE, thus it would fall in to "capitalism, covetting what the next gal has and would work perfectly fine as expected...not because it has no government involvement, but because it has no insurance company involvement, so the middle guy taking his cut for merely paperwork is not involved....more production, negates the increased demand and reduces the price of the item...this is capitalism at its best....prices should come down with more demand if production or businesses such as plastic surgegeons increase....giving more competition to meet the demand.

What is stopping more people from becoming medical doctors or internal medicine specialists or surgeons? The AMA? The government? The costly medical schools? The lack of interest by college students to take up this career?

There is more to it than meets the eye PC, and it can't be answered in a single post, by anyone, not even by you...and recognizing ALL involved is critical, as I had mentioned earlier...


While my post does not come close to answering all of the problems with the system it is eminently more sage than your "the government owes me health care, and the medical profession should service me for ...free."


It's funny how you have to make up a COMPLETE LIE PC in order to debate on this issue....sad really...and as you already know, I never said one thing that you said I said...but you had to MAKE UP your entire scenario of what you said I said in order to give me a response...wonder why?

Care
 
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I contend that the provision of health care is not something which should be influenced by the economic laws of supply and demand but instead should be provided on the basis of need.

Everything is distributed based on the laws of supply and demand.

Healthcare is no different, regardless of whether healthcare is distributed and funded by the government or the private sector. The only differences between the two are the outcomes.

I'm going to suggest that because health care shouldn't be (not "isn't", I chose "shouldn't") a sort of commodity ("commodity" in the normal sense of the word, not the specialised economic sense) subject to the laws of supply and demand. I know I'm repeating myself but I made the point that "need" isn't "want" (I mightn't have used those words I admit).

I'm pretty sure I don't see doctors putting out the lowest bids to get work. Do they? I mean is it possible to get a couple of quotes before you get your broken toe fixed? I suppose in the US system it can happen but the question is, should it happen? That's my point, no it shouldn't happen.

Health care shouldn't be allowed to be bounced around in a market situation. It's a need not a want like a car. You can't afford a new car, you do without. You need health care, you NEED it, you're not shopping around for a new car.
 
I'm pretty sure I don't see doctors putting out the lowest bids to get work. Do they? I mean is it possible to get a couple of quotes before you get your broken toe fixed? I suppose in the US system it can happen but the question is, should it happen? That's my point, no it shouldn't happen.

How is that any better than government capping prices and not allowing markets to clear? There are many specialists who come to the US because their pay is capped in the government medical system. My cardiologist is a fellow Canadian. He came down here because he can make a lot more money here. Canada loses a great doctor because of their system. Similarly, I had a friend die of cancer in Canada several years ago. He wanted access to Avastin but couldn't get it because the government refused to pay for it at the time. I'm not sure what the status is now, but it used to be that you had to wait months to get an MRI in Canada. American entrepreneurs set up MRIs in trailer homes on the border for Canadians willing to shell out $800 for an MRI and get the results tomorrow.

So, "should it happen" that cardiologists leave, cutting edge drugs are not available and you can't get an MRI in a reasonable amount of time?

I am not making a judgment on which system is best. My point is that everything is subject to supply and demand. What we think should or should not be subject to supply and demand is irrelevant because they are, and interfering in it creates distortions.
 
I'm pretty sure I don't see doctors putting out the lowest bids to get work. Do they? I mean is it possible to get a couple of quotes before you get your broken toe fixed? I suppose in the US system it can happen but the question is, should it happen? That's my point, no it shouldn't happen.

How is that any better than government capping prices and not allowing markets to clear? There are many specialists who come to the US because their pay is capped in the government medical system. My cardiologist is a fellow Canadian. He came down here because he can make a lot more money here. Canada loses a great doctor because of their system. Similarly, I had a friend die of cancer in Canada several years ago. He wanted access to Avastin but couldn't get it because the government refused to pay for it at the time. I'm not sure what the status is now, but it used to be that you had to wait months to get an MRI in Canada. American entrepreneurs set up MRIs in trailer homes on the border for Canadians willing to shell out $800 for an MRI and get the results tomorrow.

So, "should it happen" that cardiologists leave, cutting edge drugs are not available and you can't get an MRI in a reasonable amount of time?

I am not making a judgment on which system is best. My point is that everything is subject to supply and demand. What we think should or should not be subject to supply and demand is irrelevant because they are, and interfering in it creates distortions.

Markets? I'm arguing that that particular mechanism has no place in health care.

My point is that not everything should be subject to the laws of supply and demand.

My other point is that we - society - can control where those twin laws apply and it's a social/political choice, not a matter of determinism, to allow them to operate in health care.
 

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