Here’s a thought experiment. Suppose the year is 1902. Automobiles exist, but they are rare and expensive. The assembly line has not yet been invented, and car manufacturing, such as it is, is done entirely by craft methods.
Now imagine that our politicians decide that every American family, as a matter of national policy, should have its own automobile. (Let’s also stipulate that the trades involved in automobile-building–machining, welding, carpentry, etc–are tightly controlled by guilds.)
What would happen?
I think the answer is pretty clear. If vast amounts of money were poured into the industry, with every family being entitled to a car at a fixed, low price–and if the quantity and productivity of car-building resources was not sharply increased–then people would be waiting 5 or 10 years, or more, to get their cars.
Of course, this isn’t really a post about National Industrial Automotive Policy, circa 1902–it’s about healthcare. I observe that almost all of the national discussion and debate on this issue has centered around the question of who pays, who gets paid and how much, and what the restrictions on care should be. But if there are really tens of millions of Americans now receiving inadequate medical services, and if this problem is to be remedied, then where will we find the additional resources–and/or the additional productivity–to remedy it?
It seems to me that we should be discussing questions like:
*Do we need additional medical schools and/or nursing schools?
*Are the divisions of labor within the medical profession optimal?..for example, do we need to place more reliance on nurse-practitioners or to create additional intermediate-level professional roles?
*Are the selection criteria, curriculae, and teaching methods for the medical professions optimal, or we in some cases requiring more years of schooling than really necessary–or, perhaps, the wrong kind of schooling? (See comments by GTWMA at this post.) What about entry criteria?
*What productivity improvements can realistically be expected from electronic medical records systems? (I expect that there are indeed some, but they are less overwhelming than sometimes assumed.)
*What happens to the costs for expensive medical equipment–CAT scanners, MRI machines, etc–if the production volumes are sharply increased? It seems unlikely that these are the only manufactured products in history which do not have economies of scale. On the other hand, what happens to unit cost if constraints on the application of these systems result in reduced production volumes?
I don’t know enough to have strong opinions on any of these issues, but I do believe that answering them needs to be part of any rational debate and policy on healthcare. And for those who argue that these are highly specialized topics, not for discussion by the general public–when you bring something under increased government funding and control, then public discussion is not only appropriate but essential.
The lack of interest in these topics by politicians and media says a great deal, I think, about the disconnect of many of these people from the tangible aspects of society and the economy.
As a general matter, throwing money at something to create additional demand will indeed create additional supply–in a completely free-market environment. Where the market is tightly restricted, this effect cannot automatically be counted upon.