Sunday, January 14, 2007

Recent commentary: Don't control health care prices

(published 28-Jan-2007, Appleton Post-Crescent)

Governor Doyle, California Governor Schwarzenegger, and Senator Edward Kennedy have all been demanding more government control of health care. None of these worthies think beyond their next election nor do they remember what happens when government sets prices. As with gasoline price controls in the 70s, price controls on health care will mean that more health care services will be "consumed" at the lower price, leading inexorably to shortages. In the real, non-price-controlled world, if a product is popular, manufacturing ramps up and more providers market it. The price goes up, too, in response to demand until an equilibrium is reached. That is, demand and price find their own level: there's plenty of product to go around, it's just cheap enough for people to keep buying it, and manufacturers can continue to make a profit. Since the price will not be allowed to go up with price-controlled health care services, the supply will simply dry up and the lines will form, just like gas lines in the 70s. Then somebody will have to decide who gets to see the doctor and who has to wait. We can see this happening in Canada, where health care is "free". Canadians come to the U. S. for surgery. Why? Because they can get it when they want it. Need has nothing to do with it. Now before you lynch me, consider: people starving around the world need food. Why can't they get it? Oftentimes it's their own governments that prevent it. If we get "universal" health care, just how do you imagine our government being able to GUARANTEE new life-saving drugs, plenty of doctors, no waiting for an office visit or surgery ... all for cheap? Get the government out of health care! If you think it's expensive now, wait until it's "free"!


Michael Ejercito said...

In Canada, there are zero medical bankruptcies. Medical bankruptcies are an abomination and they must be eliminated no matter what the cost.

Steve Erbach said...

Dear Mr. Ejercito,

Your statement is an absolute, brooking no opposing viewpoint. How can I respond if you can't or won't offer up a rationale for why "medical bankruptcies are an abomination"? All I can say is, "Are you nuts? What on earth is so all-fired special about medical businesses that make bankruptcies 'an abomination'?" Again, what can I say? Doctors take money from sick people.

Your serve.

Steve Erbach
The Town Crank