Lower Spending on Health Care Comes at a Price

One of the symptoms of heavy involvement by government in health care is shortages caused by price controls.

Although doctors in places like Canada and France are still well-paid, they are paid less than they would be in a free market in order to keep health care costs down. This even happens in the U.S. under Medicaid, which pays doctors at a lower rate.

It’s sometime argued that even these lower rates are “more than enough” for a doctor to live off of – they don’t need to be charging more. But the fact is that there are fewer doctors in countries that use price caps than there are in the U.S. (and many in the U.S. that will not accept new patients with Medicaid.)

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An Investor's Business Daily editorial covers the very real human costs that these results of reduced health care spending create:

As David Gratzer, a physician and senior fellow at the Manhattan Institute, wrote in the summer 2007 issue of City Journal: “In France, the supply of doctors is so limited that during an August 2003 heat wave — when many doctors were on vacation and hospitals were stretched beyond capacity — 15,000 elderly citizens died.”

There are economic costs as well. Health care is the largest industry in Michigan, employing 469,200 workers in May.

The payroll for Michigan’s health care jobs is a very real element of health care spending. Caps set by the government on the price of health care services in a quest to lower spending could eliminate many of these jobs, creating shortages in services and adding to Michigan’s already substantial unemployment rate.

Another reason to not get so swept up in reducing health care spending that we forget the costs it can create.