Health Care: The quandry of our survival instinct

I'm watching the Republican National Convention this evening. Sen. Bill Frist (who is a physician) is discussing, among other compassionate conservative talking points, health care. As an economist I offer this warning: Be careful when politicians discuss things of an economic nature. (OK, most things political do have some economic impact.) It is fine to say a candidate is "focused on doctors, nurses, and patients." However, economic realities must be considered. Economics is called the "dismal science". Unfortunately here is where it rears its ugly head.

Health care may be considered a "right" but it is, more importantly, a "good". And therefore it is scarce. (Actually, the argument should be it is scarce and therefore it is a "good or service". Things that are not scarce aren't very interesting to economists.) To acquire a good, something must be given up in exchange. It is not free.

Now, unfortunately, our demand for health care is often different from our demand for other goods. We like life and the quality thereof. For those of us well insured (or wealthy), with low deductibles, are likely to "demand" or purchase more health care. Those not as well insured or less wealthy, consume less health care (fewer visits to the physician, forego certain pharmaceuticals). You may conclude the impact, then, on overall health and mortality.

In addition, our insatiable demand for health care, given that we are all going to die (sorry to break the news to you) we still want to take actions to prolong our lives. It is our survival instinct. And we'll continue to demand and spend. This serves to drive up insurance rates (or "deductibles"). This then tends to increase costs either for your company-provided insurance company, or for the government (Medicare for the elderly, Medicaid for the poor), or for your out-of-pocket insurance premiums or direct purchases.

Honestly folks, I'm skeptical, especially over these next few years. There will be more and more older people as the baby boomers (those born post WWII up to 1963) consuming more and more health care later and later in their lives. The status quo is likely to continue to command more of our nations income and output. There are no easy solutions because there is no free lunch.

A good recent article is from Paul Krugman's New York Times column. ("America's Failing Health", New York Times, August 27, 2004). This link: http://bellaciao.org/en/article.php3?id_article=3045.

Or go to Google, hit the "News" link. Then search for the article using keywords from the author or article title. (This is an exercize in using Google as a research tool.) You can "subscribe" or "register" for the Times online. It doesn't cost you anything. Well, ok, there is no free lunch, it will cost you some minor personal information and time.

I've enjoyed my first days of class. I look forward to a good semester folks.

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Welcome to Jack's Micro blog. I hope it is of at least marginal utility.