Leave Our Healthcare Alone

The more I read about the proposed plans for a government overhaul of healthcare, the more I realize that what is proposed can only be bad for America. Whenever a commodity is made available to people at a price that is fixed by the government, the demand for that commodity increases. For example, if I have a health problem and I am considering going to the emergency room, I am going to think very carefully about whether I need to go if I am immediately going to have to write a check for $150. However, if the government were to fix the top price of an ER visit to $20, I am not going to take much time to think about it because I'm not going to be out much money. When you have a whole group of people who are reasoning in this way, you can see that the demand will increase very quickly. Just imagine what would happen if under government healthcare, a trip to the ER became "free".

In addition, fixing the price of healthcare will have the effect of lowering the number of healthcare professionals such as doctors and nurses. Doctor's salaries by necessity need to be lower in that case which implies that there will be less incentive for anyone to sacrifice the time and sweat equity necessary to become a physician. We therefore will have an increased demand coupled with a reduced supply which will logically lead to a reduction in the quality of care and in some cases may lead to the rationing of care.

For those interested in a good book on economics that deals with the economics of healthcare, please see Thomas Sowell's book, Applied Economics.