How elastic is health care demand?

Our reluctance to spend on preventive care causes our acute care bills to skyrocket, and on those bills there is no choice. Someone has to pay even if the patient dies.

Soupy Sales, kids’ TV star from the 1960sA New York Times feature on the difficulty insured patients are having with health care costs begs an obvious question.

How elastic is health care demand? (Comedian Soupy Sales, born Milton Supman, turned 82 in January.)

The idea of price elasticity is essential to making markets in goods and services. As prices rise, buyers forego purchases and demand goes down. Eventually the market clears.

We are presently undergoing that exercise with gasoline. Despite many folks' claims they drive as much as ever, I can get around on Atlanta freeways with no trouble on the weekend. That was not true $2/gallon ago.

So how elastic is demand for health services? Maybe it's more elastic than we think. And maybe that's not an altogether good thing.

The stereotype about British teeth being bad actually developed in the last century, when hard times made people forego a lot of things, even dental visits. Since the NHS began covering dental care, British teeth have gotten much better.

When dental visits were very expensive, in other words, the British people took poor care of their teeth. Once these visits became cheap, they took better care of their teeth.

You can learn more about health care demand elasticity by visiting a hospital emergency room. Many people wait until they're deathly ill before going to a doctor, and then die. Emergency medicine is increasingly routine care. Those with real emergencies get left out.

The point here is that the way many of us deal with rising prices may be penny wise and pound foolish. Our reluctance to spend on preventive care causes our acute care bills to skyrocket, and on those bills there is no choice. Someone has to pay even if the patient dies.

The aim of most health reform plans is to reduce out-of-pocket costs for preventive care. Or, as ol' Soupy told me every day when I was growing up,  Be true to your teeth and they won't be false to you.

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