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

[Diuretic]

Health care is a convenient name for a collection of services provided by various people and organisations to those in need of that care.

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.

In an ordinary supply and demand situation there is usually a product, good service or whatever that is subject to consumer demand, whatever that level of demand might be. General Motors has found out that consumer demand is important to a firm. Lots of people have eschewed purchasing GM products and have gone to other suppliers instead. So consumers can decide to purchase a GM product, a product from another competing firm or not to purchase a product at all. They have discretion.

A sick person isn’t a consumer. They don’t have a purchasing discretion. They are sick and in need of health care. They can’t put off buying a new model until next year, they need health care now. This is what I mean when I say there is “need.”

That is my argument for why I think a sick person should not be defined as a consumer.

As I said before, health care is a name of a collection of services. I contend that those services should be made available to people on the basis of need and that there is no consumer demand at work in that situation. That’s probably my central point in this.

There is no question that there is a requirement for payment for those services lumped together under the term “health care”. Individual providers such as doctors work at providing those services and so should be paid for their work. This is one area I can allow for some sort of concept of supply and demand. There are doctors who want to provide their services in return for payment. But of course the guild nature of doctors organisations interfere with this and in reality there are no laws of supply and demand in operation. But that’s another issue.

So who should pay for the work done by doctors? The patient or someone else?

If it’s to be the patient then the issue of ability to pay comes up immediately. Since this is about need and not consumer demand there is no discretion here. If the position is that the patient should pay then like in anything if someone can’t pay for something they don’t get it. This means that sick people in need of health care will not get it. Is that acceptable?

I think from here the argument enters the realm of how health care should be provided – through a universal health care system (which may or may not be totally free in terms of price for services) or via insurance schemes of various types or to a you don’t get it because you can’t pay for it situation. But that’s another topic.

My point here was just to try to explain why I think that health care shouldn’t be regarded as a consumer commodity (“commodity” in the usual and not technical economic sense). I contend that any assertion that health care should be subjected to the laws of demand and supply fall down because there is no consumer demand, only human need.

 

[Amanda]

Health care is a convenient name for a collection of services provided by various people and organisations to those in need of that care.

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.

In an ordinary supply and demand situation there is usually a product, good service or whatever that is subject to consumer demand, whatever that level of demand might be. General Motors has found out that consumer demand is important to a firm. Lots of people have eschewed purchasing GM products and have gone to other suppliers instead. So consumers can decide to purchase a GM product, a product from another competing firm or not to purchase a product at all. They have discretion.

A sick person isn’t a consumer. They don’t have a purchasing discretion. They are sick and in need of health care. They can’t put off buying a new model until next year, they need health care now. This is what I mean when I say there is “need.”

That is my argument for why I think a sick person should not be defined as a consumer.

As I said before, health care is a name of a collection of services. I contend that those services should be made available to people on the basis of need and that there is no consumer demand at work in that situation. That’s probably my central point in this.

There is no question that there is a requirement for payment for those services lumped together under the term “health care”. Individual providers such as doctors work at providing those services and so should be paid for their work. This is one area I can allow for some sort of concept of supply and demand. There are doctors who want to provide their services in return for payment. But of course the guild nature of doctors organisations interfere with this and in reality there are no laws of supply and demand in operation. But that’s another issue.

So who should pay for the work done by doctors? The patient or someone else?

If it’s to be the patient then the issue of ability to pay comes up immediately. Since this is about need and not consumer demand there is no discretion here. If the position is that the patient should pay then like in anything if someone can’t pay for something they don’t get it. This means that sick people in need of health care will not get it. Is that acceptable?

I think from here the argument enters the realm of how health care should be provided – through a universal health care system (which may or may not be totally free in terms of price for services) or via insurance schemes of various types or to a you don’t get it because you can’t pay for it situation. But that’s another topic.

My point here was just to try to explain why I think that health care shouldn’t be regarded as a consumer commodity (“commodity” in the usual and not technical economic sense). I contend that any assertion that health care should be subjected to the laws of demand and supply fall down because there is no consumer demand, only human need.

I pretty much agree. I don't think it should be 100% free of capitalistic constraints but I don't think anyone should do without because they can't pay. I think health care should be a basic human right in a country as great as the USA.

 

[KittenKoder]

I actually agree, I believe the best model is what they have in Japan though. The costs are mandated but the payment system itself remains through insurance. It cuts the excessive rates we see allowing even uninsured low income patients could afford it.

 

[RetiredGySgt]

I actually agree, I believe the best model is what they have in Japan though. The costs are mandated but the payment system itself remains through insurance. It cuts the excessive rates we see allowing even uninsured low income patients could afford it.

Haven't been paying much attention to foreign news lately have we? Might want to do a search on that "GREAT" health care provided by the Japanese.

 

[KittenKoder]

I actually agree, I believe the best model is what they have in Japan though. The costs are mandated but the payment system itself remains through insurance. It cuts the excessive rates we see allowing even uninsured low income patients could afford it.

Haven't been paying much attention to foreign news lately have we? Might want to do a search on that "GREAT" health care provided by the Japanese.

Okay ... the system they had at the time of the information I last saw which maybe very outdated since no, I haven't been paying attention lately because there is too much of that pop star on lately. So meh ..

 

[American Horse]

Health care is a convenient name for a collection of services provided by various people and organisations to those in need of that care.....

So who should pay for the work done by doctors? The patient or someone else?
....

I sympathize with sick people who are poor. Before people become sick they are well. They should arrange for their medical services in advance of becoming sick in the same way a person should insure a leak in their roof is repaired before the spring rains come. As poor as my family of 6-children and two adults were in 1940, we had a family doctor. I was born at home and our family doctor showed up that morning (after the mid-wife had arrived) for the big event. The bill got payed in monthly installments.

The availability of medical services today is similar in one important way; clinics. they will provide services for a set fee between $50.00-and-up for office visits. They also offer pharmaceuticals from samples or from their own pharmacies. Since people show up randomly as related to their needs, waits are for the most part short. For critical needs they will send someone to the local hospital or E.R.

People too poor to insure them selves for health services qualify for state medicaid.
People who aren't that poor can buy for themselves a health policy that fits their budget and level of risk for health problems, but they do have to take some responsibility for their future health-care needs.

But, since people have been so convinced that medical services aren't available to them, or that they are so costly that they have no hope, they operate on that basis, and don't take any responsibility for their own health care services. Market principles of competition and supply and demand work here too, and if people inform themselves, they will find that it is much better and more available than they are led to believe. It is actually affordable.

If they do not have health insurance coverage, then in effect they are insuring themselves. But in a society in which people are told that they are entitled, they will not move to provide for themselves, but instead will wait for someone else to provide for them, or take responsibility for them. They are de-incentivized to arrange for their health problems in advance.

Can someone in their 30's afford $100.00 per month for an individual health policy? Even as cheap as some of these policies are, many choose to "insure themselves" by going un-insured. Then as their medical history progresses they get what will one day be called a "pre-existing condition" and will become un-insurable except for the State-Default policies.

The best way our government could be involved would be to find some way to incentivize people, as soon as they are out from under their parents umbrella, to seek and purchase a health insurance policy, and then allow those insurers to discover what the market wants to be insured for without mandates from government. The purchaser can then decide for themselves what the size of their deductible and co-pay will be.

Without going into a lot of statistical data (but you can if you want; here> U.S. Cancer Care Is Number One - Brief Analysis ) I would much rather take my chances here than anywhere else in the world. I just had a skin cancer removed with only a one week wait for test results, between my first office visit and the removal.

 

[Diuretic]

Horse, I appreciate the info and your views. But insurance is still predicated on the notion that health care has to be purchased by a consumer. So we will have to agree to disagree.

Re your skin cancer, I hope they got it all, it's a huge problem here.

 

[Tor Hershman]

Heck, I just saw this post, Diuretic.
You are most adroit.

 

[editec]

Try as I might to find a solution to this problem I see no solution that suits all of us.

If we go back to a pure market system, the quality of health care for EVERYONE would go down the tubes.

Everyone, you ask?

Yes, everyone, says I.

The enormous advances we have made in medicine, advances that both the wealthy and the poor get, came from the huge amount of money that went into health care and that much money came to HC because nearly EVERYONE was insured.

If only 5 0r 19% of the population can pay for their health care there isn't enough DEMAND to drive those advances or to pay for much of the infrastruture modern HC needs and we have come to expect.

If you're the one guy who can afford health care in your community, that community will NOT have a hospital, for example.

So going into some kind of sink or swim pure capitalist solution is simply silly.

Nobody wants that even though I don't boubt it sounds appealing to some of you who don't think about the ecnomic BLOWBACK of it.

A mixed economy system (like single payer universal insurance) I am convinced will only work for a brief period because, while that insures everyone, and allows the PRIVATE MARKET to provide the services, the nature of capitalism WILL make the costs of that health care go up to capture the extra money going into the system until the cost of health care once again becomes a enormous problem.

Finally there is the Soicalized Medicine solution.

That sounds like it will serve all of us, except for the people who are IN the HC industry.

In that case they all end up working for the government health service, and making far less money than they're currently used to getting, and I don't think I have to explain the shortcomings of THAT solution to anyone, now, do I?

So there we have the three possible paths we might take, and in every path I see the basic flaws that are bound to become problems in the medium or shorter term.

Any way you look at it, when we are facing an aging population, and a rapidly advancing quality of better (but more expensive health care) procedures which keep us ALL alive longer, the percentage of money the society will invest into HC is bound to rise enormously.

And frankly, I cannot see any solution that I think works for the long run to solve this.

The ONLY solution that will really work (sans society getting enormously richer immediately, of course) is some kind of solution involving killing off the sick.

I guess I don't have to tell any of us that the culling the herd solution probably isn't going to be very politically popular, right?

 

[Diuretic]

Heck, I just saw this post, Diuretic.
You are most adroit.

I just wish I were Tor - but thank you. I've got no illusions about my smarts though

 

[Diuretic]

Try as I might to find a solution to this problem I see no solution that suits all of us.

If we go back to a pure market system, the quality of health care for EVERYONE would go down the tubes.

Everyone, you ask?

Yes, everyone, says I.

The enormous advances we have made in medicine, advances that both the wealthy and the poor get, came from the huge amount of money that went into health care and that much money came to HC because nearly EVERYONE was insured.

If only 5 0r 19% of the population can pay for their health care there isn't enough DEMAND to drive those advances or to pay for much of the infrastruture modern HC needs and we have come to expect.

If you're the one guy who can afford health care in your community, that community will NOT have a hospital, for example.

So going into some kind of sink or swim pure capitalist solution is simply silly.

Nobody wants that even though I don't boubt it sounds appealing to some of you who don't think about the ecnomic BLOWBACK of it.

A mixed economy system (like single payer universal insurance) I am convinced will only work for a brief period because, while that insures everyone, and allows the PRIVATE MARKET to provide the services, the nature of capitalism WILL make the costs of that health care go up to capture the extra money going into the system until the cost of health care once again becomes a enormous problem.

Finally there is the Soicalized Medicine solution.

That sounds like it will serve all of us, except for the people who are IN the HC industry.

In that case they all end up working for the government health service, and making far less money than they're currently used to getting, and I don't think I have to explain the shortcomings of THAT solution to anyone, now, do I?

So there we have the three possible paths we might take, and in every path I see the basic flaws that are bound to become problems in the medium or shorter term.

Any way you look at it, when we are facing an aging population, and a rapidly advancing quality of better (but more expensive health care) procedures which keep us ALL alive longer, the percentage of money the society will invest into HC is bound to rise enormously.

And frankly, I cannot see any solution that I think works for the long run to solve this.

The ONLY solution that will really work (sans society getting enormously richer immediately, of course) is some kind of solution involving killing off the sick.

I guess I don't have to tell any of us that the culling the herd solution probably isn't going to be very politically popular, right?

The Soylent Green solution? Not tasteful (sorry, very bad pun).

Ed you've brought up many other points which is good, my original idea was quite limited because I was trying to work out some very basic points in my own mind.

I'm reasonably familiar - but not an expert - with our system but we're a small population of 21m and frankly an easy country to run. While I'd recommend the idea of single payer to anyone I can see in a country with 300m people with the complexities of the US simply saying, "try this", isn't going to cut it.

 

[editec]

I was a vocal and VERY ACTIVE advocate for single payer univseral HC.

Testified before a committee in Augusta, for example.

My concern with that solution, because I think that will be the inevitable next phase of HC, is that our expectation for the savings that it brings to us (about 25% savings because we've eliminated the insurance companies enormous costs of HC) is that the MARKET WILL IMMEDIATELY begin responding to the influx of NEW DEMAND that comes from giving all of us HC options.

Tens years down the pike we're going to face higher prices for HC that we once again CANNOT afford as a people.

The HC community does NOT want to hear this but as an industry they're WILDLY overpaid.

Now when you're facing the Doctor who is going to save your mother's life you may tend to disagree, but when you're paying this gal (I'm so PC sometimes!) millions of dollars a year to save SOMEBODY'S ELSE'S MOTHER, you are likely to think their somewhat overpaid.

If anyone really wants to know what the real problem is that we have yet to even acknowledge, just go to you local hopital and look at the cars in the staff parking lot.

Throw in the outrageous profit margins HC suppliers are making, and there isn't enough money in the whole damned economy to keep rewarding these people as much as we're currently rewarding them.

I admire HC professionals, and I do think they deserve to make a lot of money, but folks...the amounts of money a lot of these people are making is ridiculous in comparison to what most of their patients are making.

 

[garyd]

US law requires that if you have a life threatening issue that you are required to be treated whether you can pay or not.

Everything regardless of whether it is run by the government or private organiztions is subject to the law of supply and demand.

 

[Bullypulpit]

Let's examine a few basic facts. The ER of ANY hospital is the provider of last resort for those who have no medical insurance. Those for whom this is the only health-care option are, all too often, coming to the ER because the disease process they are suffering from can no longer be tolerated. They are so sick they have to go. The alternative is further pain and suffering and frequently death. the cost of their hospital stays are higher and, all too often they come in so ill that they leave in a body bag.

The costs of an emergency room visit are far greater than those associated with routine office visits and preventive care. Since the hospitals can seldom recoup the expenses involved in providing this last resort care, the costs are passed on to consumers who can...i.e. those of us fortunate enough to still have health coverage. As a result, our insurance carriers raise their premiums to us forcing more of us to choose between food and medicine...or even out of health insurance coverage altogether. I see this every day as a critical care nurse.

So you see, we're paying the costs of the uninsured through higher premiums to our health insurance providers anyways. Why not pay the lesser costs of routine office visits and preventive health through a single payer system than the current, crumbling system we now have?

 

[editec]

US law requires that if you have a life threatening issue that you are required to be treated whether you can pay or not.

Not anymore. the Hill Burton act which once assured that hospitals orginally funded for construction by the FEDs was basically eviserated durin ght Regan administration.

Many of those formerly city and county hostpitals went PRIVATE decades ago.

And FWIW, they not even forced to accept medicade and medicare pateitnes, either.

So your believe that everyone has access to health care is not entirely wrong, it is meerely wrong NOW.

Everything regardless of whether it is run by the government or private organiztions is subject to the law of supply and demand.

Yeah, that is true.

Regardless of who pays, the government or the public, supply demand is still going to effect costs.

Supply demand works differently in HC, but it still effects it nevertheless.

Ironically the more HC is available in an area, for example, the COSTLIER HC tends to be.

Weird isn't it?

It is until you realize that the patient doesn't decide what HC thye need, the MDS do.

Then it all starts to make sense.

 

[Care4all]

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.

Health care for a sickness or injury is a need, not a ''demand'' and the service given by doctors or hospitals etc is a necessity, not a ''supply''...that's just a FACT....in my opinion....so any formula for pure capitalism does not work if one part of it does not work...and this would be the case for taking care of ones health care needs.

 

[PoliticalChic]

Health care is a convenient name for a collection of services provided by various people and organisations to those in need of that care.

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.

I'd like you to consider the question from the exact opposite point of view. Individuals should be encouraged to plan in advance for illness, and retirement, which are often related.

Free market methods can, while perhaps not solving all problems, can mitigate many.

John Goodman, of the , President Center for Policy Analysis
Ph.D, Columbia University, spoke about this at Hillsdale College, in February. His plan is for treating health care providers as entrepreneurs, and allowing doctors to re-price and re-package services, without the mandates of government requirements.
The free market examples in health care:
a.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.

b.In Dallas, a health care provider has two million customers who pay a small fee each month for the ability to talk to a doctor on the telephone. Patients must have an electronic medical record, so that whichever doctor answers the phone can view his medical records. The company is growing due to the fact that it provides a service the traditional health care system doesn’t provide.

c.Walk-in clinics are growing around the country, where a registered nurse sits at a computer, the patient describes symptoms, the nurse types it in and follows a computerized protocol, the nurse can prescribe electronically, and the patient sees the price in advance.

d.Concierge doctors, doctors who don’t want to deal with third party insurers. In Dallas, these doctors charge $40 per employee per month, give telephone and e-mail access, and keep electronic medical records.

e.Medical tourism: hospitals in India, Singapore and Thailand are competing worldwide for patients. They have lower costs, and high quality, with doctors board-certified in the United States, and publicize their error rates, mortality rates, infection rates, etc.

Current workers will not be able to support baby boomers, and should have health savings accounts used to but certain medical services. There would be a roughly 4% tax toward this end, perhaps 2% each for employer-employee invested in the marketplace.

The government plans, Medicare and Mediaid are way overextended, and CBO forecasts predict that by mid-century, Medicare and Medicaid alone are going to crowd out every thing else the federal government is doing.

 

[editec]

Individuals should be encouraged to plan in advance for illness, and retirement, which are often related.

Right...for a couple years recently the american working class was SO DAMNED BROKE that the saving rate for this nation was ZERO..in fact it was a NEGATIVE NUMBER.

Now the grand thinkers in HC on the right think we ought to save up for that illness that we will ALL get which will cost more than most of us paid (for thiry years) for our homes.

How fucking stupid are these experts, anyway?

 

[PoliticalChic]

Individuals should be encouraged to plan in advance for illness, and retirement, which are often related.

Right...for a couple years recently the american working class was SO DAMNED BROKE that the saving rate for this nation was ZERO..in fact it was a NEGATIVE NUMBER.

Now the grand thinkers in HC on the right think we ought to save up for that illness that we will ALL get which will cost more than most of us paid (for thiry years) for our homes.

How fucking stupid are these experts, anyway?

Please, read carefully, and in the future, in the interests of looking more intelligent and less like a crotchety oldster, try to ask about any aspect that you do not understand.

Actually, let me withdraw that criticism (the language in your response engendered it).
I posted :
"Current workers will not be able to support baby boomers, and should have health savings accounts ..."

When I wrote 'current', I was picturing those currently entering the work force, and I see now that I should have written same.

Those beyond entrance level should be able to keep whatever they had been promised, to the extent that their programs are funded. Consider the GM situation.

Government attempts have resulted in a)Social Security with a 2009 liability of $100 trillion, or six-and-a-half times our entire economy, over taxes it expects to receive; b) Medicare is six times larger in terms of unfunded obligations. Baby Boomer retirements will dramatically increase these deficits.

Imagine if both were to crash, in what position would our seniors be? If those on the left get national healthcare, the result will be almost as dire. There will be both rationing of health care, and, as we see in both Canada and Britain, refusal by a cash-strapped system to pay for expensive cancer drugs.

If consumers save and spend their own money, and doctors are allowed to act like entrepreneurs, health care can be prevented from rising faster than our incomes.

 

[PoliticalChic]

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.

Health care for a sickness or injury is a need, not a ''demand'' and the service given by doctors or hospitals etc is a necessity, not a ''supply''...that's just a FACT....in my opinion....so any formula for pure capitalism does not work if one part of it does not work...and this would be the case for taking care of ones health care needs.

"...that's just a FACT....in my opinion...."???

Health care is just like any other part of society. If it is not paid for, it will be paid for: rationing or deprivation of life-saving drugs,

Let's not be short sighted, as those on the left are wont to be, why be a doctor if you are going to be a slave to Care4all? Who do you serve for free?

Why would there be the wonder drugs that make our lives better and longer if there were not a profit motive?

You think the drug companies make too much profit? Then buy stock.

Capitalism does work, will work if you look elsewhere other than government programs for your salvation.