Three Important Points About Health Care
Posted in Society and Politics on July 2nd, 2009 by Rex Stanfield – 1 CommentHow many unemployed doctors do you know? How many are not seeing patients because there just aren’t enough patients to go around? What about nurses? Why do you think the Immigration and Customs Enforcement agency has a red carpet fast track to residency for health care professionals who desire to come to the USA to live? Aren’t you always hearing, as I am, that there is a shortage of qualified doctors and nurses? How many hospitals and clinics have you seen recently closing their doors, laying off all their employees and leaving vacant buildings behind, as manufacturing plants are doing in the US lately? I don’t know anything about medicine, but I do know quite a bit about economics. So I have three major points about the American health care system.
Point 1. The only way to reduce the cost of medical care is to increase the supply, reduce the demand, or a combination of both. The single-payer plan that the government is sprinting toward will have exactly the opposite effect on both sides. It will reduce supply and increase demand. Therefore, the real economic price for everything medical will be higher than it is today, but since pricing will be capped, shortages will result, and government-imposed rationing will be required.
- Supply: How many more people are going to want to spend years of hard work and study, and hundreds of thousands of dollars to become doctors, when they know the government will limit their earning potential but not limit their potential liability? If they become doctors and ever make one mistake over the course of an entire career, They could be ruined and all that work and cost will have been wasted. Answer: There will be fewer doctors and nurses. Also, when limits are imposed on what hospitals, clinics, doctors and nurses and drug companies can charge, shortages will result, as they always do when artificial price ceilings are imposed.
- Demand: Who goes to see a doctor more frequently: Someone who knows they’ll have to write a check each time, or someone who can see the doctor for free? Of course, the person who must pay for doctor visits will critically evaluate the need against the cost. Once in Canada I literally saw someone take her 8-year-old daughter to an emergency room in Vancouver in the middle of the night because the girl had a minor case of the sniffles. No exaggeration. She knew it wasn’t a serious health problem; she simply wanted to get some antihistamine, and the drug stores were closed. She knew she wouldn’t have to pay for the hospital visit, because her health coverage was all government-provided. I’ll repeat that. She went to the ER to treat a runny nose, and thought it was the most natural thing in the world. She wondered why I was flabbergasted. Hopefully there weren’t any people there at the time needing limbs re-attached or bones reset.
Point 2: The newest technology is always expensive. If you want latest model of iPod/Kindel/HDTV, etc., you’ll pay dearly for it, but if you’re economizing, you’ll settle for an older model. New technology is a luxury. But this is not the case with health care. A newly-developed medical procedure is a necessity the instant it is invented, if it’s a procedure you need. Therefore, the best, most advanced medical system in the world (still the USA for now) is always going to be the most expensive. Get used to it. So in any system that results in health care costs being capped, the development of new technologies will be less common. Why would any company spend millions on R&D if they cannot sell the technology for more than it cost to invent?
Point 3: People often say that because medical care is necessary to save lives, and because of the Hippocratic Oath, doctors should be altruistic and treat people without expecting to receive high salaries in return for their skills. Why doesn’t that apply to everyone? For example, I would argue that truck drivers also provide life-saving services to the society. In fact, I’ll assert that if beginning tomorrow there were no truck drivers to deliver basic goods and food, citizens would begin dying sooner and in greater numbers than if there were suddenly no doctors. But no one expects truckers to donate their time and work. Rather, in an ideal world, people should be paid according to a combination of how much value their work brings to society as a whole, and how rare and difficult to obtain their skills are. Therefore, doctors and other health care professionals rightly earn very high salaries. In my opinion, far more than much-more-highly-paid movie actors earn theirs. Of course the market determines the proper compensation for any job, and I’m not advocating the government regulate incomes. But if it were to do so, why should health care providers, who provide the most immediately vital services, be the ones to recieve less?
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