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Line 113: − + − + − + − If an elderly Canadian is vacationing in Florida and falls and breaks her hip, which is very painful, the Canadian system of health care will not even reimburse the patient for surgery at the nearest hospital. Instead, the patient must fly back to Canada in excruciating pain to be operated on by a government-controlled doctor there.+ − In the United States, under the free market, anyone can pay his own money for medical care at any time. For example, there is an immediate care, cash-based doctors' office within a half-mile of our classroom. But in Canada, someone with an illness is typically put on a waiting list and, depending on his age and likelihood of survival, may not see a doctor for months. In some cases, patients pass away before they obtain the treatment they need. The Canadian government sets limits on wages and prices, and that causes shortages because there is always less supply when the price is artificially lowered by government control. (Look again at the shape of the supply curve: at lower P, there is lower Q). + − − Line 130:
Line 128: − − Currently there is a massive national debate over the future of health care in America. The Democratic proposal includes a "public option," which would be a government-controlled health insurance program analogous to the Post Office. In addition to the public option, the proposal would '''''require''''' everyone to purchase a government-approved insurance plan, even though it may not cover the medical services they want. Certain government-defined health benefits, like abortion and even sex-change operations, may be included in that insurance plan despite people's objections. Health care would probably be rationed, as in England, by government panels deciding who should receive it. − − Sarah Palin, the Republican Vice Presidential candidate in 2008, made this famous remark in the summer of 2009 against the plan: − − :The Democrats promise that a government health care system will reduce the cost of health care, but as the economist Thomas Sowell<ref>Thomas Sowell is a prominent African American economist who consistently supports free market solutions to health care and other problems.</ref> has pointed out, government health care will not reduce the cost; it will simply refuse to pay the cost. And who will suffer the most when they ration care? The sick, the elderly, and the disabled, of course. The America I know and love is not one in which my parents or my baby with Down syndrome will have to stand in front of Obama’s “death panel” so his bureaucrats can decide, based on a subjective judgment of their “level of productivity in society,” whether they are worthy of health care. Such a system is downright evil. − − In conclusion, there are problems with the existing health care in America: costs are too high, many cannot obtain insurance, and cures for some conditions like paralysis are not being developed soon enough. But is the solution to these problems more use of the free market, or more government control?
Economics Lecture Two (view source)
Revision as of 02:26, February 26, 2013
, 02:26, February 26, 2013→Discussion: the National Debate over Health Care: trimmed a bit
That decline of marginal profit towards zero is due to the inevitable difficulties in selling additional goods. For example, the first SUV produced by Ford could sell at a high price, but Ford does not want to get stuck with making too many SUVs and not being able to sell them at a profit. Ford doesn’t want to make any more SUVs in a given year that it might have to take a loss on. Ford keeps producing SUVs only until its marginal revenue falls to its marginal cost, and its marginal profit falls to zero. Do not worry if you do not completely understand these last two paragraphs; we'll discuss this again in greater detail in a future lecture.
That decline of marginal profit towards zero is due to the inevitable difficulties in selling additional goods. For example, the first SUV produced by Ford could sell at a high price, but Ford does not want to get stuck with making too many SUVs and not being able to sell them at a profit. Ford doesn’t want to make any more SUVs in a given year that it might have to take a loss on. Ford keeps producing SUVs only until its marginal revenue falls to its marginal cost, and its marginal profit falls to zero. Do not worry if you do not completely understand these last two paragraphs; we'll discuss this again in greater detail in a future lecture.
==Discussion: the National Debate over Health Care==
==Discussion: Health Care==
By far the single biggest industry in the United States is health care (medical care). It represents a massive one-sixth of our entire economy -- including annual expenditures of more than $2.2 ''trillion'' -- and costs are increasing each year. It has three major components: government-controlled (Medicare and Medicaid), insurance-controlled, and private pay or uninsured. Many are unhappy with our system, yet it is in many ways the best in the world. For example, the survival rate for the most prevalent form of cancer in men -- prostate cancer -- is 92% in the United States, but the survival rate for the same disease in England is only 51% under its government-controlled system.
By far the single biggest industry in the United States is health care (medical care). It represents a massive one-sixth of our entire economy -- including annual expenditures of more than $2.2 ''trillion'' -- and costs are increasing each year. It has three major components: government-controlled (Medicare and Medicaid), insurance-controlled, and private pay or uninsured. Though many are unhappy with our system, it is in many ways the best in the world. For example, the survival rate for the most prevalent form of cancer in men -- prostate cancer -- is 92% in the United States, but the survival rate for the same disease in England is only 51% under its government-controlled system.
Most other countries have some form of government-controlled, or socialized, medicine. In the countries of Canada, North Korea and Cuba, it is actually illegal to pay money to a doctor simply to see you. You can see only a doctor paid by the government in those countries. In England, there is a two-tiered system: good care is provided to the few who can afford to pay for it, and free but inferior care is provided by the government to the vast majority who cannot. This government-controlled medical care became law in England due to hardships created by World War II, when the government was controlling most of the English economy. The English accepted government control of medicine just as they accepted government control and rationing (see discussion of rationing below) of nearly everything else.
Most other countries have some form of government-controlled, or socialized, medicine. In the countries of Canada, North Korea and Cuba, it is actually illegal to pay money to a doctor simply to see you. You can see only a doctor paid by the government in those countries. In England, there is a two-tiered system: good care is provided to the few who can afford to pay for it, and free but inferior care is provided by the government to the vast majority who cannot.
In the United States, under the free market, anyone can pay his own money for medical care at any time. But in Canada, someone with an illness is typically put on a waiting list and, depending on his age and likelihood of survival, may not see a doctor for months. In some cases, patients pass away before they obtain the treatment they need. The Canadian government sets limits on wages and prices, and that causes shortages because there is always less supply when the price is artificially lowered by government control. (Look again at the shape of the supply curve: at lower P, there is lower Q).
Lowering wages and prices prevents supply from rising to satisfy demand. Then demand is much greater than supply, and patients have to wait a long time to see a doctor. There is a lower survival rate from cancer in Canada than the United States because of the delays in diagnosis and treatment in Canada. In Buffalo, which is on the Canadian border, doctors treat many Canadians who come over the border to pay for American medical care now rather than wait for it in Canada.
Lowering the wages and prices prevents supply from rising to satisfy demand. Then demand is much greater than supply, and patients have to wait a long time to see a doctor. There is a lower survival rate from cancer in Canada than the United States because of the delays in diagnosis and treatment in Canada. In Buffalo, which is on the Canadian border, doctors treat many Canadians who come over the border to pay for American medical care now rather than wait for it in Canada.
This limiting of supply by government-set pricing causes what is known as "rationing". More people want the service (a medical operation or treatment) than is available. A waiting list is created to handle the surplus in demand over supply. But when someone has a cancer growing inside of him, delay by being placed on a waiting list can be agonizing and deadly. Quick treatment helps improve survival from cancer. In the United States, where government does not set all prices and there is not any rationing yet, the survival rate for five common forms of cancer is over 90%. Thanks to the powerful benefits of the free market, the rate of survival continues to improve in the United States.
This limiting of supply by government-set pricing causes what is known as "rationing". More people want the service (a medical operation or treatment) than is available. A waiting list is created to handle the surplus in demand over supply. But when someone has a cancer growing inside of him, delay by being placed on a waiting list can be agonizing and deadly. Quick treatment helps improve survival from cancer. In the United States, where government does not set all prices and there is not any rationing yet, the survival rate for five common forms of cancer is over 90%. Thanks to the powerful benefits of the free market, the rate of survival continues to improve in the United States.
A free market in health care benefits children too. The life expectancy for a child born with cystic fibrosis in the United States is 37 years, but only 27 years in Ireland under its government-controlled (or nationalized) health care.
A free market in health care benefits children too. The life expectancy for a child born with cystic fibrosis in the United States is 37 years, but only 27 years in Ireland under its government-controlled (or nationalized) health care.
==Assignment==
==Assignment==