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Supply Side

by Clair, broker consultant last modified Apr 03, 2008 08:27 PM

We have been ignoring a constant. Just as we cannot abolish the law of gravity (although we can mess with it) neither can we abolish (or ignore) the law of supply and demand.

It is well documented that there is a shortage of doctors. It is critical for surgeons, especially in rural areas. Medical schools have admitted lowering the number of students admitted ("because managed care would reduce the need"). Also, our cities are dominated by a very few hospital "systems". Both of these situations reduce supply. At the same time demand is constantly increasing. Just like an apple falling from a tree, the results are predictable. An increase in demand or a reduction in supply increases cost.

Universal coverage will only increase demand and therefore increase cost. Rathere than throw money at the universal "black hole" (just look to the Canadian system for an example, let's direct federal resources to producing more providers of care. An emphasis on shorter training (physicians assistants, etc) would create more supply and, in turn, more manageable cost.

Hospitals, too, must be made more available. Both facilities and providers now have a cost-plus environment. Whatever their cost, they pass to the consumer. A requirement for transparent pricing will aid the consumer in deciding which of the more available services to choose.

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