Funmurphys: the Blog

Great Minds and All

From the Great Minds think alike department:

"If you ask most people about the cost of medical care, they may tell you how much they have to pay per visit to their doctor's office or the monthly bill for their prescription drugs. But these are not the costs of medical care. These are the prices paid. The difference between prices and costs is not just a fine distinction made by economists. Prices are what pay for costs -- and if they do not pay enough to cover the costs, then centuries of history in countries around the world show that the supply is going to decline in quantity or quality, or both."

"I've noticed that a lot of Democrats and some Republicans have difficulty with the difference between price and cost. Cost is what it takes to make or provide something. Price is what you are charged for the thing or service. Politicians are constantly telling me how they are going to lower the cost of something -- typically healthcare, ocasionally housing -- when all they are going to do is lower the obvious price and do nothing for cost. Are they going to do anything about the government regulation and oversight that adds to the cost? Heck no. They're going to have a single pay system dictate price. It's enough to make you vote Libertarian."

I'd like to claim "advantage blogosphere" but I can't since Thomas Sowell has been pointing this difference out for a long time and he's the guy who first clued me into the difference.

The problem with healthcare is that we've got a half-baked system that is socialism on the cheap, substituting employers for the government where possible. This leads to a lot of well meaning people to advocate full socialism for medicine - the single payer system. They are convinced that in this case, full socialism will work. The problem is, full socialism never works, and shouldn't be tolerated for something as important as healthcare. The real answer is to end the partial half-baked socialism by getting employers out of the picture and get a market (yes, a well regulated one) in healthcare going.