Re: What is the root cause of the rising cost of health care ?


"*Anarcissie*" <anarcissie@xxxxxxxxx> wrote in message
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On Aug 26, 10:34 am, "Peter Olcott" <NoS...@xxxxxxxxxxxxx>
wrote:
"*Anarcissie*" <anarcis...@xxxxxxxxx> wrote in message

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On Aug 25, 12:34 pm, Gordon Sande
<g.sa...@xxxxxxxxxxxxxxxx> wrote:
On 2007-08-25 12:33:48 -0300, "Peter Olcott"
<NoS...@xxxxxxxxxxxxx> said:

Why is the price of health care rising much faster
than
the
price of other goods and services?
(See below)

It is purely a service. Like teachers, personal
trainers,
etc
the cost remains "constant" while the cost of
manufactured
goods "falls". So the costs of pure services go up
while
the
costs of goods go down. To become more "good"-like
health
care will need more streaming, specialization,
technical
aids and other forms of management, just like various
other
pure services. Think ATM machines instead of bank
tellers.
Automatic elevators with no operators. Direct dialing
rather
than telephone operators.

If your theory were correct, then the same amount
of labor ought to buy the same amount of medical
care even if the nominal price in monetary units
changes.

However, it is my impression that the cost of
medical care is rising considerably faster than
the average wage.

What would cause the cost of a good or service to rise at
a
much faster rate than the rest of the economy? Could it
be
that the demand curve is artificially inelastic to
changes
in price?

Sure. The question is, why is the demand curve inelastic?
I don't think it's because people are unaware of the
price.

The medical practitioners that are providing the goods and
services are not even aware of the price. IF you ask anyone
about the price it takes them several days to get back to
you, and then it is often with incorrect figures.

It seems to me it's because of an authoritarian situation,
one in which the targets or victims are passive and don't
think they can do anything about it, and the perpetrators
are doing their best to maintain the mystification and
the scarcity.

As I said before, if people were unaware of price
considerations, we wouldn't be hearing about Single
Payer. It wouldn't cross anyone's mind.

Health care consumers do not shop around for the best price.
They don't shop around because it is not (directly and
immediately) their money.



What would happen to the price of food if we had food
insurance where everyone paid a fixed monthly premium,
and
then could buy anything they wanted at the grocery store
as
long as they paid an additional 10% co-pay? Would this
effect the price of food? Would the demand for the more
expensive food items tend to increase if people only had
to
pay an additional dime on the dollar?

If the demand for these more expensive food items did
substantially increase and supply remained relatively
constant (or grew at a much slower rate than the increase
in
demand) what would happen to the price of these items?
Would
the price rise? If the price would rise, how much would
it
rise? Would it rise substantially?

Actually food is not a good example because it is,
in a sense, manufactured, and as demand for it rises
so do economies of scale. If you really wanted to drive
up the price of food, you would create scarcity.


My example is perfect. If the example was actually applied
the price of steak would quadruple. Imagine only paying a
fixed monthly premium for the right to buy all of your
family's food for a dime on the dollar. (co-pay) Imagine
further that there is a yearly cap where the unit cost drops
to zero. (out of pocket limits). I know that my eating
habits would change drastically.


.

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