The Return of Economic Wednesdays

This weeks edition...

...Health Care. Whats up!

{Prices?}

Universal health care. Obama's plan. Insurance. Economics. The world. Just some of what we will briefly {yeah right...briefly..Pat has no idea} cover in today's (and Friday's) edition of "Economic Wednesdays".

I'm hoping to briefly give some explanation to whats going on and then give you more of my opinion than is probably necessary on this issue.

On second thought...there is going to be two parts {Pat's lazy so maybe even three parts} to this edition.

PART 1

An Intro

Universal health care, a public option (which is a not-for-profit insurance company run by the government) {Pat's least favorite part of this whole thing}, regulated insurance industry, and regulated prices {the only part Pat likes} are all a part of Obama's health care plan. He wants every person in America to have health care, sounds ideal, but there are many things you have to keep in mind.

Lets get started.

Since this is an economic blog. We will look at the issue from an economic view point. Lets look at health care as a viable product in the market system. It is a product. It has a price. There is a limited supply. There is competition. So like everything else, the market system should be able to regulate health care. The market should be able to find the right price (through supply and demand), create better products (competition, effort to increase profits), and distribute the right amount where it is needed (again...supply and demand). But NO! {over dramatic}. Health care doesn't work that way. For a couple of important reasons,

1. Most people don't have a limit on how much they will pay for health care. Even more so in a life or death situation. This effectively ruins the whole supply and demand aspect.

2. We don't even pay for our health care. Insurance does. This again ruins supply and demand laws. {Even if insurance is a good idea, having employers get it for you doesn't make sense}.

These two main reasons are why health care is all out of wack. They effectively ruin health care as a viable market activity. Yet people need health care. People want health care. But the market is not able to work out correct {reasonable} prices. So whats the solution?

Obama's solution is a universal health care plan. Give everyone health care for free. Tax them. Call it a day. Ok, not exactly but kinda. I don't think universal health care is the best solution. But it can work...

I think the real issues lie within the public option plan, current insurance industries, current hospital practices, current health care costs, and people's choices.

The next part will take a look at these issues from an economic view point....get pumped!

Pat