Bear Flag Republic Radio Weblog

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And finally, someone almost speaks the truth: "Health care industry representatives, meanwhile, said costs are rising because demand is up." Increasing demand accounts for the majority of price increases. Note I said "price". Health care providers (and insurers) all charge more because they can, when demand increases relative to supply. Americans, on average, make twice as many visits to health care providers today as they did in 1980, but have no better health than in 1980. Prices (and costs to a lesser extent) are rising due to increase demand for services that are paid for by someone else. "Someone else" is a key component of this story, because according to the U.S. Census, the average, out of pocket expenses for all types of health care products and services, actually declined as a percent of household income, every year from 1980 to 1999. As products and services become cheaper, we tend to purchase more of them. I know this conflicts with the view that health care is getting ever more expensive (and it is) but the person making the purchase decision saw a decline in prices.

Finally, "At the center of Kerry's ideas is his proposal to have the federal government reimburse employers 75 percent of medical bills over $50,000 that a worker runs up in a year. The reimbursement would, in effect, make the government a secondary insurer and ease costs for employers, workers and private insurers.".

This proposal, like all the others, boils down to my oft stated comment, "Health care costs too much so let's find some more people to help pay for it". Most previous proposals lack steps to moderate demand and improve health. Without those steps, these proposals merely increase demand even further (by lowering the prices actually paid and seen by consumers). [Edward Mitchell: Common Sense Technology]

comments < 12:56:14 PM        >

Of interest. The growing economies of India and China are also increasing their own demands for oil and oil-based products. This is a big factor, now, in why world-wide oil prices crossed the $40 per barrel mark. However, it is also significant that both economies are now growing at a time when other alternatives may be available. China is apparently planning to invest a lot in to wind and other forms of energy production.

When a country goes through a growth phase, the technologies available to it at that time of growth, can have a profound impact long term. Europe has lots of passenger rail service, while the U.S. does not. This occurred, in part, because Europe was rapidly growing when rail service was the best available alternative. The U.S. went through huge growth after the invention of the automobile, and later, the airliner. Hence, we use autos and planes, and very few trains. Australia uses the airliner, mostly, to traverse their enormous country. Their choices, as they were, were influenced by what was available at the time of their growth.

It is quite possible that India and China's economic growth may come at a time coinciding with other approaches to energy production that are now feasible. This could have very interesting ramifications over the next several decades. [Edward Mitchell: Common Sense Technology]

comments < 12:55:53 PM        >