Wednesday, December 01, 2010

Price Controls in Medicine-Reality tends to support theory

What is the theory? Answer-price controls tend to 1)cause shortages,2) decrease the quality of the good or service controlled 3) increase demand and 4) encourage the development of black markets,bribes and other "work-arounds"

I am aware of all but number 4 happening in regard to Medicare in the U.S. Now we have apparent examples of black markets (or at least bribes) happening in the setting of the price control health care in Canada. See here for a discussion by Canada born economist, David R. Henderson writing at the blog Econolog.

The news story in the Montreal Gazette describes OB docs in Canada taking side money to guarantee that they will be available at the time of the delivery.

One commenter to the blog entry wondered if U.S. patients, after Obama Care really gets going,will be able to go to Canada to offer side payments to get their treatments there sooner than they could here due to the long lines that will develop when millions of more insurance card carrying patients compete for what will be a vastly too small supply of primary care docs. Actually the problem is already worse as seniors struggle in some areas to see physicians. See here for comments regarding that.

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