Friday, May 5, 2017

Healthcare Policy as a General Equilibrium Response

There's been plenty of discussions in recent years, how healthcare could be made "more efficient' - especially given the problems of Obamacare. Why, then, does a more rational approach appear to be missing now? Is healthcare little more than a political battle ground,with opposing viewpoints as to what current budgets appear to be capable of providing?

Not so long ago, some believed that a Republican Congress could lead to a more efficient and accessible marketplace in healthcare. For example, even an article from the New York Times (November 2016) emphasized that the problem wasn't so much physician supply, but rather, problems in terms of overall geographic distribution and work responsibilities. Aaron Carroll summarizes in "A Doctor Shortage? Let's Take a Closer Look":
What no one seems to be debating is that we have a shortage of services. We could fix that by increasing the numbers of physicians, either by training more or allowing more to immigrate into the country. We could fix that by improving the ratios at which physicians enter specialties or primary making the healthcare system more efficient, by distributing the resources we have more effectively, or by increasing our willingness to use midlevel practitioners through changes in regulation or licensing.
None of these approaches are easy, and all would most likely require governments to act. As the next administration takes power, choosing at least one of these paths seems necessary to improve access in the health care system. 
Fast forward to the present. Prior to the latest vote to repeal Obamacare (the House version of the American Health Care Act), I noticed complaints from physicians and healthcare associations, that they were not being asked to take part in the discussions. How significant was this problem? Did it mean there wouldn't be time to take a closer look, at potential supply side reforms? After all, there's a big difference, between supply side reform, versus what is also shaping up to be a protectionist reaction (immigrants "stealing" our healthcare), on the part of taxpayers and service providers to general equilibrium conditions.

Citizens and policy makers alike, may have already "moved on", by taking for granted what healthcare's supply side structure is capable of now, in a time of growing budget constraints. Nevertheless, physicians may not actually be excluded from these discussions, for they are being elected to both House and Senate more frequently in recent years. Will the Senate revisit some of the more important economic considerations, should they "start from scratch"? If they don't believe it's important to do so, then why have economists and pundits alike, concentrated on supply side improvement potential for so many years?

Unfortunately, the cynic in me believes the general equilibrium response could hold, as healthcare increasingly comes down to who "deserves" access and who does not. Given this circumstance: Arbitrary limits for knowledge use, have turned what could have been a competitive free market, into moral positions which also hold economic, political, and social ramifications. Only consider how the general equilibrium response is not just a national factor, but equally problematic at a state level. Then, it's easier to understand these remarks from a Texas Senator and physician, Donna Campbell:
It's misguided to think that an x amount of uninsured is because of the government. People need to have responsibility and accountability. Some people choose not to have it. They're not sick and they're just not going to pay for it. We also have a lot of folks that come into our country illegally, and they're counted, and they use our healthcare system and take up the capacity that we have.
I've noted a number of times in recent years that a general lack of ability to reciprocate for vital time based services, could be partly responsible for the backlash to immigration. Alas, Campbell's response helps to reinforce my suspicions. Simply stated, the general equilibrium response for a publicly funded time based product, means these service providers (of time based service product), only stand to gain by limiting access to said product. Likewise, a normal taxpayer response for healthcare in general equilibrium conditions, is to reduce one's tax exposure where possible, to the funding of time based services.

This is yet another reason why I've suggested a marketplace for time value at local levels, so that entire swathes of the population are not dismissed as potential free riders, in systems of which their time value never had a realistic way to make a difference in the first place.  Protectionism shouldn't have to be just another excuse, for giving up on realistic supply side responses to economic problems.

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