Wednesday, April 7, 2010

Supply Side Solution to Healthcare

Why is health care even a topic of controversy? The problem is this: no one is able to afford it without insurance. See a doctor? Boom, $200 an hour just to take a look at you. Need some medication? Boom, another $50. Got longer term problems? Need a surgery? Boom, at least a few thousand dollars. Need to stay a night at hospital? We are talking thousands a night. Even if your body recovers, your finance won't.

Something is obviously wrong here: outrageous expensive! Money hungry doctors and hospitals will say, well we need to pay insurance too! We are afraid that you sue!

Why are doctors so expensive? One day my high school economics teacher asks that. One student replied, "Doctor's work is so important, one mistake you can die, so they deserve that money".
Then the teacher asks, "how did you come to school today?". The student: "by bus?"
Then the teacher says "well, one mistake the bus driver make, you and dozens of others will die". The teacher says, "The answer is this: Supply and Demand, there are more people who can drive a bus than to heal you"

Now this was a great way to introduce the concept of "Supply and Demand" that I still remember after decades.

Ok, there are so few medical school spots that the brightest students fight themselves for.
Anything less than 4.0 GPA? The students will scream in frustration.
How many of these medical students actually want to HELP people? Helping people is just the by-product of the millions of dollars they will make by robbing the sick.

How about this: use that govt money to build more medical schools, train more students, and build more hospitals to let everyone have more access to health care. The "Invisible Hand" will bring the cost down. Make laws to CAP costs. AND, that actually create JOBS.

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