Can someone explain this to me?

G8rMom7 · Post by **G8rMom7** » Thu Jan 21, 2010 12:43 am

One of my high school friends started a health care debate thread on her FB page. This one guy (who I do not know) got on in favor of gov't run health care and said something I have never heard, so I was hoping one of you could enlighten me...

Health care can't be fully open to competition, due to exspense of operation. It is a type of business that monopolizes naturally due to extreme operating exspenses any economics class would explain that.

I had basically said that most of the Health care ills could be fixed with opening up competition both with Insurance companies AND doctors. For instance you could have insurance companies competiting to give you the best catastrophic coverage and then your doctors would have to be more competitive about their basic care...similar to the way we deal with Car insurance where you have various mechanics that will offer deals on oil changes and tires while your insurance company handles it when you get in a wreck.

Anyway, do you think he was saying that doctors could not compete? Maybe he's talking about hospitals? It sort of put me off when he said "any economics class would explain that"...I HATED economics class (although I'm regretting that I didn't pay attention more in college), so I figured I just wasn't getting it. What say you?

annarborgator · Post by **annarborgator** » Thu Jan 21, 2010 1:06 am

Just about anything based on a university economics class is at best nonsensical and at worst just plain wrong. I ignore basically every academically-trained economist in the world.

I suppose what he's trying to say (which I disagree with) is that in a free market the supply of health care cannot rise to meet demand because the costs associated with increasing the supply inhibit the expansion of the industry to meet demand. I think his position also assumes that demand is a constant which I don't think is correct despite the fact that many people assume that demand for health care is a constant.

He might also being trying to make the more simplistic argument that the economic barriers to entry (beginning capital investment) mean that once a health care provider invests that capital to start the business it has such an advantage over would-be competitors that it can render the potential competitors almost powerless to compete.

G8rMom7 · Post by **G8rMom7** » Thu Jan 21, 2010 9:09 am

Thanks. I still don't understand but at least it seems you have more a grasp of what he was getting at than I do.

MinGator · Post by **MinGator** » Thu Jan 21, 2010 9:11 am

I think he has taken one simple principle in economics and applied it to the entire HC industry. This shows how little he knows about economics. If it were a one widget issue his theory might hold true, but the fact that there are constant advancements in HC that render the single widget theories useless. Add to that the single biggest factor in HC cost is the Gov't regulations that have been put into effect and IMO his "economics class" theory blows up in a hurry. I would also say that there is no way that demand is steady state. The populations grows, so therefore the demand must be increasing as well. The only way to stay ahead of the curve is to add more doctors or advance medicine to allow faster treatment.

G8rMom7 · Post by **G8rMom7** » Thu Jan 21, 2010 10:40 am

Thanks 95...I used your paragraph above and rephrased it a little to post a response in the thread. I was going to ask your permission but then I realized you aren't on FB so I don't give a rats arse if you care! LOL. Just kidding. I just thought I'd represent myself as smarter than I am to a total stranger on FB...no foul.

MinGator · Post by **MinGator** » Thu Jan 21, 2010 1:51 pm

Uh-oh, hope I'm right!

G8rMom7 · Post by **G8rMom7** » Thu Jan 21, 2010 2:00 pm

DOH!