Mike Winther dives into the pros and cons of government-funded healthcare and how it affects supply, demand, and price. This lecture was given during the Obamacare debate years. He talks about how government and insurance programs have contributed to the escalation of healthcare prices.
Insurance has made people less cautious about how money is spent. He offers solutions for making healthcare affordable and insurance appropriate so that all people can have access to affordable healthcare. This is an interesting debate that is still applicable today.
You'll Learn:
[00:51] Healthcare economically is no different than any other product or service.
[02:23] A story about losing the argument, because you gave up the foundation.
[05:02] An interview where a prior CEO of NPR wanted people of very little means to stop funding NPR.
[07:17] The debate about whether the government has the right to force people to buy a product was over in 1934 with the introduction of Social Security. The foundation was given away.
[10:57] The cause of high healthcare costs. The price of anything is a relationship between supply and demand. Price can also be forced up by increased demand. The price of healthcare is high because of a mismatch of supply and demand.
[12:52] The average time a doctor spends with a patient has gone down every decade for the last five decades.
[13:49] The data says that we don't have enough doctors. The AMA determines admission rates of medical schools. It appears they are capping the amount of doctors.
[17:47] The easiest way to create larger government programs is to point to a national security threat or poverty. You can't have a solution until you have a problem. Less access to healthcare creates a healthcare problem.
[21:56] Mike shares a chart that explains the effect of supply and demand on price. Reduce supply and the price goes up. The same applies to doctors. Our population has increased faster than the number of doctors has increased.
[23:47] Medicare made healthcare demand go up. So did Medicaid in the 1960s. Government solutions just made the healthcare issue worse.
[25:03] As prices escalated, people needed insurance for more things. A third party payer pays for a service, yet they're not the recipient of the service.
[25:38] When people have health insurance they are not as cautious with how the money is spent.
[26:12] Employer paid insurance is tax-free health insurance.
[27:40] Because of the price increases, the working class poor or people who aren't covered by the other programs need Obamacare.
Insurance only makes sense when you insure for unlikely events.
[30:25] How to control healthcare costs and make it available for the poor. Eliminate the monopoly in medical schools. The supply of doctors would go up, and the medical care prices would go down. Take away the tax discount for employer paid health insurance.
[31:09] If people pay their own health insurance, they will shop around and the cost will go down.
[33:11] The only way overcharging patients is possible is because of the third-party payers. Mike gives the example of the $37 hospital water pitcher.
[36:24] The free market decides who gets what through price.
[40:07] Some of the issues of socialized medicine are discussed. Healthcare allocated by the government committee limits people. Allocating by price enables people to get the care through charity, family, or other means.
