Forum, Sept. 24: Increase Health Care Supply, Too

Friday, September 22, 2017
Increase Health Care Supply, Too

We all realize that health care is a scarce resource, and every scarce resource needs to be rationed. Diamonds are rationed by price. The playground water fountain is often rationed by waiting in line.

Since I can remember, every intervention by the government in the health care market has increased coverage (demand): Medicaid, Medicare, children’s health, Obamacare, and perhaps Obamacare’s replacement or Berniecare. Apart from policy, medical breakthroughs have also increased demand for medical services by those who previously would have been relegated to pain pills or worse. More people getting health care is a moral good.

Through more than 50 years of expanding demand, however, I cannot recall any serious effort to increase the supply of medical care. No wonder prices keep rising and waits lengthen.

Congress can take steps to increase the supply of health care in the short term and long term. Tort reform could encourage retiring providers or newly retired providers to continue their practices. Increased scholarship funds for potential providers would also increase supply. As a rule, when supply increases, prices and waiting times decline, ideally with no diminishment in quality.

In addition to tort reform, the Democratic Congress (which passed Obamacare) also missed the opportunity to overturn the McCarron-Ferguson Act, which precludes the sale of insurance across state lines, and limited competition among insurers is a sure way to keep insurance premiums high.

So legislators: Do what you want to demand, but ameliorate the rationing systems by increasing competitive supply!

Dennis Logue