THOUGHTS ON WHY HEALTH CARE LOGICALLY SHOULD BE THE MOST EXPENSIVE SERVICE OR PRODUCT THERE IS

Health care professions are among the most intellectually demanding. Becoming a doctor is arguably more difficult, time consuming, and expensive than any other profession. Only a very small percentage of the population has the brainpower or stamina to become a doctor, whereas, no disrespect intended, anyone can become a janitor or work at a convenience store, etc. Doctors must spend years and decades in difficult pre-med programs, medical school, and finally lengthy residences before they can go into practice; and they rack up large debt in America during all this education. And similarly for other health care professions (e.g. drug researchers must spend years in Ph.D. programs and post docs, etc.) Also, there is so much uncertainty in health care. The human body is the most complex machine in the universe and we only really have a small, partial understanding of it to use in medicine. Thus often the processes (i.e. treatments) that we use to try to affect cures are inherently inefficient and costly, sometimes “groping in the dark”. This is most acute in drug research, where a drug company must fail with upwards of thousands of dead end drug candidates for each successfully approved drug. All these failures cost considerable time, money, and resources and it is these failures that you are really paying for when you buy the small percentage of successful drugs. Many people don’t appreciate this fact.

Thus, it could be argued that health care is inherently one of the most supply limited services there is. And on the demand side, even assuming there is no government mandate for universal coverage, maintaining your health is one of the most core things people care about and thus demand for health care services can be argued to be among the highest of any services or products. From these two facts, it is clear that the market clearing price for health care will be among the highest (if not the highest) of any service or product; this is a consequence of simple supply and demand.

Also, medical knowledge (i.e. the knowledge that all doctors must learn and know) is greatly expanding year after year, and this further depresses the supply level of doctors. For example, while a large percentage of the population could likely have mastered the medicine of 100 or even 75 years ago and become doctors, a much much smaller percentage today have the intellectual capacity and perseverance to master modern medicine and thus supply level as a percentage of population should decrease as time goes on. This could be an important reason health care prices are expanding faster than inflation, as supply is further and further constrained as time goes on while demand keeps going up and up. Thus we must conclude that health care is inherently expensive and there will be limits to how far we can reasonably reduce costs.