How to Grow the Supply of Health Care RIGHT NOW!


“For two or three generations, we’ve almost completely ignored the supply side” of health care, warns Robert Graboyes, an economist who specializes in health care issues. That's especially a big problem now that Obamacare is coming online. The whole point of the program, after all, is to increase demand for medical services. Yet even President Obama and his supporters acknowledge the plan does next to nothing to generate more doctors and more medical innovations.

Graboyes, a senior research analyst at George Mason's Mercatus Center, sat down with Reason TV's Nick Gillespie to outline immediate ways to grow the number of hospitals, doctors, and nurses to serve millions of newly insured patients.

Even more important is the need to increase the pace of the transformative medical innovation that has always extended lifespans and raised the quality of life, says Graboyes. At the dawn of "molecular medicine," in which drugs are targeted to specific individuals, the FDA’s backward-looking and hyper-expensive approval process is more destructive than ever. Medicare's byzantine cost-codes freeze into place yesteryear's solutions. At the state level, "certificate of need" laws make it tougher than ever to expand or build new health care facilities.

We've got to "look for every obstruction to the supply and get rid of it," says Graboyes.

Produced by Todd Krainin. Cameras by Ford Fischer and Josh Swain.

About 9 minutes.

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  1. What does all this Teathuglican deregulation of Kochporations have to do with access to health care?

  2. If supply went up, then prices that health care workers charge for their services would go down. Why do you hate health care workers?

    1. Because they stick neefles and tubes in me?

  3. Finally, someone gets it! The gov says the problem is that healthcare is 20% of the GDP; we need to get that cost down. This ass-backwards.
    Why not make it 22% or even 23%?
    The gov never says that the cost of cars or houses are too high or any other “product”.

    The rest of the world wants to buy our health care. Why are we making it hard for them to do so?

    1. In fact, when housing prices dropped, they freaked out to raise them.

    2. It’s that demand (consumption) that the Leftards are always saying we need, isn’t it? In fact it’s the best kind of stimulus according to their rules because much of it goes to services (wages) and products made in the US (med devices and drugs).

      The unfortunate part about the rest of the world is that they want our health care, but they won’t pay for it. Price controls solve all problems! Seems to me that more people should be able to buy some nice french wines and german cars. We should apply some price controls there…

  4. That’s especially a big problem now that Obamacare is coming online. The whole point of the program, after all, is to increase demand for medical services.

    No, that isn’t ‘the whole point of the program’. For me, this is a strange thing to read.I have never once, in the years since this train wreck of legislation has been enacted, ever thought, even on accident, that this was about demand, in other words the consumer.

    This has always been about controlling the consumer (you and me).

    1. Yes, can we please stop granting these people any benefit of the doubt, they have demonstrated their willful dishonesty and ill intents far too many times.

      This was never about reducing costs, or expanding access, it has always been about control – control of the consumers and control of the providers.

      In short a naked power grab.

      1. Yup.

        Once a person’s health is public domain nearly everything they do is subject to regulation.

  5. As I’ve said before, traditional supply and demand models don’t work for American healthcare. Why? Because the largest payor is the government, which in theory, can keep paying for services as long as there’s demand. So if someone else is paying for your healthcare, then there’s no incentive to not over utilize, right? Right. My dad ran a hospital for decades and realized this right from the start. The more doctors and facilities you create, the higher costs will be because individuals don’t actually bear their own costs in any kind of traditional economic way. I’ve worked in healthcare law for years and have seen it first hand.

    Now if everyone purchased healthcare like they did TVs or cars, then the supply side model would likely work.

    1. Forgot to add: Doctors create their own business. How? By writing scrips and orders. Those who actually work in healthcare realize this and realize that more docs equals more utilization and more costs.

      Has anyone every thought that more lawyers equal less legal/litigation costs? Of course not. More lawyers equal more litigation/legal costs because they have to drive their business by suing and creating a need for their services. Imagine the boost in the economy if nobody had to hire a lawyer for one full year. Which one of you have argued for more lawyers? Healthcare and law are zero-sum games. No value is really added to the system by either, maybe only in the sense of “maintaing the status quo” by staying alive or out of jail. Healthcare and legal are taxes and burdens on the economy. Less really is more here.

    2. The Congress has near monopsony power, spending $6.50 of every $10 on medicine spent in the USA.

      The state houses have near monopoly power deciding licensing and thus supply of doctors.

      The Congress through its agency, the FDA, has near monopoly power, deciding drugs and equipment, and thus supply of technicians needed to administer the foregoing.

      All of this is well covered by “traditional models” in academia economics.

  6. I don’t think it works that way. Most physicians do not benefit by prescribing medications. They are paid to care for patients by evaluating and treating conditions. So the goal is to ‘see’ as many patients as possible (who have a means to pay for said service). Having more health care providers does not increase ‘utilization and costs’ unless there are patients who need to be treated and have previously been unable to receive said care. If you want to address the component of costs related to physician services look to increase the number of physicians. By doing so you will quickly find yourself in the quagmire of professional guilds which have failed (for reasons good and mostly bad) to facilitate the increase in the number of trained physicians. Of course the government is largely complicit in this economic meddling by limiting the number of physician trainees financially supported in academic medical centers.

    1. “I don’t think it works that way. Most physicians do not benefit by prescribing medications.”

      You obviously don’t know or work with physicians. Writing srips for meds or orders for imaging or procedures produces repeat business for the doc and can also mean profits from other facilities the doc has an interest in. That’s why the Stark laws were made. Docs are very protective over “their” patients. And intend to make as much money as humanly possible off them.

      Having more health care providers does not increase ‘utilization and costs’ unless there are patients who need to be treated and have previously been unable to receive said care.

      It most certainly does since most are paying out of pocket. I have witnessed this first hand. As long as Medicaid or Medicare will foot the bills, people will demand limitless treatment and the docs are happy to oblige. I’ve worked with hospitals and with doctors. Have you?

      1. ** aren’t paying out of pocket.

  7. Unfortunately the governing philosophy in advanced countries has long been that 100% of health care (services & products) be the best conceivable, because they can afford it for everybody. Of course they can’t, but they’d like to pretend they can and that there is no tradeoff between quality & quantity.

    1. Not really.

      Britain and Canada hardly have top flight “best conceivable” health services, and indeed, both actually have boards devoted to nothing more than denying access to certain treatments.

      France took a slightly different route by engaging in what amounts to blackmail, by promising to void patents and steal technology (fun fact: the best industrial spies in the world aren’t the Japanese or the Chinese, but the French) if drug and medical device companies don’t agree to sell products at their fixed prices. Several other countries (including Germany) have followed the French model.

      For the second model, guess who gets to foot the bill? That’s right, American consumers.

  8. Sarcasm Button On:
    RE: How to Grow the Supply of Health Care Now!
    Comrades! We must never go back to health care run by the capitalist pigs. The masses should never be able to choose for themselves as something as important as healthcare. The American populace is too stupid to think for themselves. They do not recognize the superiority of a statist produced health care system. One only has to look to Sweden for…oh wait. They starting to privatize their health care Well, there’s England with their National Health Care system where there are more government workers then beds. You can’t beat that! Oh wait…they’re starting to privatizing their health care system too. Damn. Well, there’s Mexico and their health care system that provides superior care…oh wait. They’re all moving up here for their health care. Well, there’s Canada Care where their citizens get great health care, eh? Oh wait, the governor of Nova Scotia went to America for his heart surgery because he didn’t want to wait months to get life saving surgery. Well, there’s Cuba. They have the greatest health care system in the world. Michael Moore said so, and who’s going to argue with El Porko? Oh wait…Fidel Castro had his open heart surgery in Spain. Damn. If you can’t trust a repressive, cruel sack of shit like Fidel Castro, who can you trust? Any way, socialized medicine is the best in the world. Dear Leader Obama wouldn’t lie to us.
    Sarcasm Button Off

  9. Most innovations in healthcare result in very expensive treatments. The issue is access (people being able to afford healthcare). Innovate a way to provide universal access that doesn’t involve government subsidies, and then you’ll have beat the liberals.

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