Wednesday, November 6, 2013

Peter Klein: The Basics of Government-Regulated Healthcare


  1. There is something really unique about a surgical procedure. By definition, the supplier of non-elective surgery dictates demand. When the supplier dictates demand, competition drives up prices. When profits fall, more services are dictated. This is why the cities with the most competition spend the most on health care. There is no market based solution here. Carl Menger's marginal utility theory does not apply when the supplier dictates demand and that means the Austrian school has nothing to say about non-elective surgery.

    1. Why do you, "Jerry Wolfgang", always say something ridiculous?

  2. Jerry,

    1. Demand for non elective services is determined by circumstances and not by the supplier.

    2. If markets don't function for non elective surgery, do you suggest that the government or a central planning agency is better at distributing scarce resources?

    3. If your answer to question 2 is yes, where has it ever been demonstrated that governments/central planning agencies are more adept at allocated scarce resources than markets?