Administrative costs have gone through the roof on the physican level, the hospital level and the insurance company/ hmo level. Every study I've ever seen indicates this fact. What's the ratio of paper pushers to doctors?
Tom Lehman
gcf at panix.com wrote:
> Steve Perry wrote:
> > > Here is a central economic question that I've never heard answered
> > > satisfactorily: *Why* have costs spiralled upward so dramatically in
> > > the past 20 years?
>
> 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