The Law of Supply and Demand - "Healthcare Rationing for our Future”
Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply and demand, according to Investopedia.com, a Forbes company.
Let us consider then the latest proposal in the United States Senate to pay for “Healthcare Reform” in part by taking $500B out of Medicare and also, perhaps, change the eligibility age for Medicare, at the same time, to 55 years of age rather than the current 65 years. So, we are going to add a decade of Americans to the Medicare roles while taking $500B out of Medicare?
If you believe the Supply and demand concept and also understand how care givers are reimbursed by the government then it is easy to see the calamity this can cause in the healthcare market space. You see, the $500B is not being taken away from the patients directly but rather the caregiver’s reimbursement rates. Hospitals, Physicians, and other associated care giving entities in the continuum of care will be squeezed by this lack of funding. Consequently, more of them will literally stop accepting Medicare patients but rather opt for direct pay or other private insurance funded patients out of a need to stay in business. The more “Public Option” centric healthcare becomes the more physicians and clinicians will opt out of the business, leaving a severe shortage of caregivers leading to a severe lack of supply of healthcare.
If that last paragraph is mind boggling so is the reasoning behind the thinking of Government Controlled healthcare. One thing is certain however, the more severe the shortage, the better it will need to be managed minutely giving technology providers even more challenging technologies to develop.
Comments
This seems to not be a question but a discussion, anyway I'll add: Yet another aspect of the supply and demand equation is the overall availability of caregivers. If we accept that there are tens of millions of Americans who don't have access to doctors, nurse practitioners, etc. today and that they will be empowered after reform, one might ask where are the hundreds of thousands of new health care professionals going to come from to take care of all these new entrants to the system? As price cannot vary in this new equation, time substitutes for that value, so the answer is longer waits for appointments, tests and procedures, the scary "r" word, rationing, merely reflects the result of these new demands upon the current level of supply.
Posted by: Bruce N. Goren | December 18, 2009 09:38 AM
While I do agree that the current status and shortage of healthcare in the U.S. gives technology providers opportunities to develop many more tools to assist the general public and providers, I do believe that these tools will have to be multivalent and more inclusive.
Messages from Debra Xiangjun Hayes (3):
RE: The Law of Supply and Demand, "Rationing of American Healthcare"
RE: The Law of Supply and Demand, "Rationing of American Healthcare"
RE: The Law of Supply and Demand, "Rationing of American Healthcare
Posted by: Debra Xiangjun 杜湘君 Hayes | December 19, 2009 12:15 AM
There are many questions and issues truncated within this question. First, I think Americans have spoken with regard as to how much they are willing to pay for services. This becomes evident through the analysis of those who do not have insurance and those who do, the prevalence of medical tourism and, of course, the rising choice of alternative medical practices and services. Of course the highest costs are resultant of the "patch and fix" medical system that America has adopted. Thus, those who comprise the captive audience, those who enter emergency rooms, etc., pay the highest prices. In most cases, these events and costs could have been avoided had price met demand and/or the American system was based on quality instead of quantity. The latter was reaffirmed at the 2009 IOM Summit on Integrative Health Care and the Health of the Public.
That said taking 500B out of Medicare will only increase the amount of persons with chronic and difficult conditions and those with life-threatening adverse events that could have been avoided. This will increase medical spending, significantly delimit quality of life measures and alternately coauthor other medical accommodations and choices for healthcare. In addition, more hospitals, clinicians and the like will continue to turn away patients, as they have in the past. This is not something new.
However, the cost and benefit analysis provided through the WHO and the annual ranking compared and contrasted by per-capita spending and the lack of "healthy people" in the United States indicates that the medical system in the U.S. is not quality based. Rationing, as you suggest may not only make doctors and healthcare practitioners better but might also encourage preventative care at the most primal level. This area attracts and demands attention for several reasons.
Hans A. Baer in his book Medical Anthropology and the World System highlights how technologically delivered medicine in any system ultimately serves less people because it detracts a significant amount of resources from the medical system.
Dr. Sobel in her 2008 Philadelphia Enquirer interview reveals that more technology based diagnostics within a healthcare setting are not essential. They do make bad doctors better, but they present more health risks and iatrogenic effects than the diseases themselves quite often. Accordingly, we might be asking how we might encourage better competency, knowledge acquisition and skill acquisition among American doctors.
Of course, the cuts in funding mentioned in the Healthcare Reform bill also ask healthcare workers to ask themselves why they entered the field in the first place.
Many of the consequences we now face are a direct result of the 1910 Flexner report and Carnegie's ambition to limit the number of doctors , make healthcare a scarcity and therefore raise the status of doctors. However, this fused with Social Darwinism, Eugenics and our view of Darwinism, which in America is infused with Lamarckian hierarchy, has ultimately coauthored a hunger for the "new," the "modern" and its associative technology. Together, these have established and broken the system.
Based upon all these affectations and realizations, Dr. Margaret Chan (2008, Nov. 7) insisted that the universal rise of noncommunicable, chronic and difficult diseases ultimately coauthored the need for integrative medicine and pluralistic systems. This is not solely due to cost but also because traditional medicine has much to offer these conditions, heart, disease, diabetes, cancer, etc. in compassion, comfort, care and prevention. Accordingly, the current status of health and/or lack thereof within the U.S. begs your questions and many others.
While I do agree that the current status and shortage of healthcare in the U.S. gives technology providers opportunities to develop many more tools to assist the general public and providers, I do believe that these tools will have to be multivalent and more inclusive.
Links:
http://www.integrativepractitioner.com/article_ektid9232.aspx
http://www.who.int/dg/speeches/2008/20081107/en/index.html
http://www.ama-assn.org/ama1/pub/upload/mm/369/flexner.pdf
Posted by: Debra Xiangjun | December 19, 2009 12:42 AM
It soon will be a Matrix style global system. The Matrix (government) will imprison people (through ever increasing taxation) in order to sustain and grow a source of power. The power comes from the peoples ability to earn and pay taxes which ironically becomes more and more difficult to do as the Matrix grows in number and complexity.
The current machine systems (aka legislation & bureaucracy) that are being built within the US Governmental Matrix like Health Care, Cap-and-Trade, Stimulus, Jobs Bill, etc...) will so burden workers that they will no longer be able to sustain their own standard of living and the capitalistic free market system will eventually collapse.
Health Care? Forget about it!
Jeff
Posted by: Jeff Williams | December 24, 2009 05:29 PM