Tag Archives: supply and demand

Supply & Demand and the Cost of Health Care

Supply & Demand and the Cost of Health Care
by
David Schlecht

Imagine for a moment that everyone in America was college educated and everyone was a doctor. How much would it cost to go to the doctor?

Since there would be more doctors than were needed, the supply & demand would make the value of doctor services almost worthless.

In every non-American developed country, doctors make a reasonably good living but are not paid like gods. In America, supply & demand has been interfered with and there are fewer doctors than the demand. Therefore, doctors in America are prohibitively expensive.

Now, let’s imagine for a moment that America becomes a first-world country again and provided free education, all the way up to doctorates. Everyone who wanted to be a doctor and had the ability (not just the money) could be a doctor. What would happen to the cost of our medical care? That’s right, it would go way down.

So, why do you suppose America has this problem that the rest of the developed world doesn’t? What has been messing with our supply & demand?

There are two things that distort the supply & demand for medical care in America: 1) The American Medical Association and 2) America’s failure to provide free education to the gifted, not just the wealthy.

1) The American Medical Association actively limits the number of new doctors entering the field. This sort of interference with our free markets should be outlawed and people caught manipulating our markets for profit should go to jail. People are dying because our medical system is so broken and some people are making money off this broken system. Send them to jail. Murder is murder even if you don’t see the faces of the victims and their families.

2) Americans are saving a few dollars in their taxes by not providing better education for everyone but are then paying thousands of dollars more in medical expenses. Americans are smarter than that. Yet, we still hear the Tea Baggers and the Republicans say how we need to lower our taxes even further. Not too bright, now, huh?

The solution should now be quite obvious. We should join the rest of the developed world in the 21st century and extend free education through doctorate degrees. We should even include a small stipend to help students to pay their expenses while going to college. And, secondly, we should send to prison those people caught interfering with our supply of doctors.

Remember, when it comes to markets, the system of supply & demand explains a lot.