Michael Pollak:
> I thought it was because, under the pre-HMO system, cost was no object --
> plans paid for whatever the doctors said you needed. Which was an
> continuous incentive to invent more elaborate and expensive ways to extend
> your life -- the demand for which is almost infinite.
Historically, the supply of medical services has been constrained by monopolistic practices. The demand, on the other hand, remained fairly strong. As the difference between rich and poor increased, the rich increasingly bid up the price of the limited medical services available. One observes the same thing with other inelastic supplies, like real estate or educations at prestige-bearing institutions.
Goods on which industrial methods can be used and which are not under monopoly constraints have not risen as much in price. In fact, where demand is inelastic, like food -- a rich person can eat only three or four times as much as a poor person -- the price has actually fallen.
The ascendancy of HMOs is bringing corporate power and industrial methods to medical services. My impression is that presently the HMOs are trying to cut costs and improve profits by reducing the quality of the services, but they do seem cognizant of price resistance.
One thing in this scene that seems odd to me is that there are virtually zero quasi-socialist HMOs, i.e. cooperatives.
Gordon