Wednesday, August 26, 2009

The law of supply and demand applies to health care too

What happens when the supply of widgets needed to sustain life is less than the demand or said another way, the supply of widgets is far less than the number of widgets people need to stay alive? Based on current evidence, everyone but Democrats would understand that the cost of widgets will go up in a free market and distribution of available widgets would have to be limited in some way, in other words, rationed. If the free market is eliminated by government control, the price of widgets may not increase but there still would not be enough to satisfy the demand; the only result would be that widget suppliers would not gain from the shortage but there would be fewer people interested in becoming widget suppliers.

If a widget is health care, then when more people are added to the reservoir of people entitled to health care by including them in health insurance programs and the supply of health care providers and the cost remains the same, just like the example above health care must be rationed. Rationing health care under any circumstance is evil but if you inject the element of rationing according to cost effectiveness, then the result is fatal to older people.

Applying the principal of “cost effectiveness” in health care rationing decisions obviously suggests that younger people with more years of life statistically remaining are favored over older people with fewer statistical years of life left. If you are an older person you will lose life’s lottery.

But as bad as that is, it’s not the only consequence of health care supply and demand. Analyzing what happens when more people are placed under health insurance in a static situation is made easier by looking at what happened in the laboratory of Massachusetts where universal health care was put into effect by law in 2006.

If Massachusetts is any guide, the passage of Obamacare is almost certain to increase demand and worsen the shortage of doctors. Access to health care doesn't mean much if there's no doctor to provide it. If the Massachusetts paradigm becomes law as Obamacare, the United States will be short 124,400 physicians by 2025, according to the Association of Medical Colleges, and that does not include the 15,585 new primary-care providers Obamacare is estimated to require.

Kevin Pho, a primary care physician in Portsmouth, N.H., wrote on that while Massachusetts is often held up as a model for national health reform, the reality is different. About 97% of Massachusetts citizens have health insurance, which is the highest percentage in the country. The state also has the highest concentration of doctors in the country. Although this seems ideal, Pho says that "less publicized are the unintended consequences that the influx of half a million newly insured patients has had on an unprepared primary care system."

The Massachusetts Medical Society reported that the time for a new patient to find a primary care doctor now ranges from 36 to 50 days. Half of all internal medicine physicians have closed their practice to new patients.

Another consequence of Massachusetts’ mandated health insurance for every citizen, is that visits to the state's emergency rooms jumped 7% in two years because many people did not have access to a primary care physician. This increases costs since emergency room care can be up to 10 times more expensive than an office visit for the same condition.

Dr. Jane Orient, executive director of the Association of American Physicians and Surgeons, told the Washington Examiner. "Promised coverage is not the same thing as care. All you're getting is a place in the waiting lines."

Those lines get even longer as overburdened physicians cut their workload or retire altogether. A survey last fall of 270,000 primary care physicians by the Physicians Foundation found that 30% expected to see fewer patients, 13% would find something that did not involve patient care, and 11% planned to retire.

Dick Morris, the well known former Clinton advisor, asks "How is Obama going to cover 50 million new people without any more doctors or nurses? The answer is he is not. What that's going to mean is rationing."

There is another serious problem. According to, abortion will be a covered service under the House bill (H.R. 3200). Without the conscience clause allowing medical care providers to decline to provide abortions on moral grounds, and the Freedom of Choice Act still looming, what will Catholic physicians do?

According to the Catholic Health Association, Catholic hospitals make up 13% of the nation's nearly 5,000 hospitals and employ more than 600,000 people. CHA says one of every six Americans hospitalized in the U.S. is cared for in a Catholic hospital. Obamacare will likely deny health care to millions if Catholic Hospitals are forced to close to avoid breaking the law.

All of you out there who wanted “hope and change,” how is that working for you?


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