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Thread: Soaring cost of healthcare sets a record

  1. #21
    I'm not-low all the time
    Kushinator's Avatar
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    Jan 2006
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    06-21-18 @ 01:14 PM

    Re: Soaring cost of healthcare sets a record

    Quote Originally Posted by washunut View Post
    Perhaps what makes this confusing for some is that the person using this service is not the one paying for it. Most health care is provided by either the government or insurance companies. When you charge the user, i.e. if they have to pay a higher deductible then you see the usage go down.

    An example of this is that the co-pay for generics is lower than if you buy the
    original. Thus people switch to the lower cost drug. So there is price elasticity.
    You are making a weak reference to cost price elasticity because comparison between normal, generics, used, etc... skews the relativity as other factors influence their price. The health care industry as a whole faces severe inflationary concerns for the foreseeable future without proper policies implemented to minimize externalities.

    It is essentially saying that price elasticity in the auto market exists because of used cars, when this is not at all the case. On the extreme end, you have "Giffen goods" which have a positive sloping demand curve.
    Last edited by Kushinator; 02-05-10 at 04:51 PM.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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