Is Health Care Like Other Goods and Services?

09 Aug

I’ve been tied up with an excellent leadership summit that was held this past Thursday and Friday, so I’ve been away from the computer for a bit, which is why there was no blog post on Friday, and why today’s will be short and sweet as well. Things should be back to normal on Tuesday.

Today, I wanted to raise the issue of whether or not health care is truly the same as any other good or service. That is, does the marketplace for health care operate according to the same economic principles as the marketplace for hiring a lawn service or the marketplace for buying a pair of tennis shoes? Are the laws of supply and demand the same across the board? Are the prerequisites for a well-functioning market universally present? Or is health care different? I have my own views, but I don’t want to taint your own before you have a chance to think about it. Think about yourself as an economic actor. What goes through your mind when deciding to purchase a new car? A bookcase? A hamburger? A health insurance policy? Really think about it. Then see if you notice any similarities and/or differences. What are they? Post a comment and share them with the rest of the class.

Then, after you’ve done that, read this quick post on the topic by Uwe Reinhardt, who focuses not on the economics behind individual actions (positive economics), but on the economics from a societal perspective (normative economics). How do the things you were thinking about as an individual intersect the points Reinhardt raises? This is something we must wrestle with before we will make much progress in the arena of health reform.


Posted by on August 9, 2010 in Uncategorized


2 responses to “Is Health Care Like Other Goods and Services?

  1. Jan Baer

    August 10, 2010 at 2:32 am

    Lawn service debt seems unlikely to send one to bankruptcy court. You can find cheaper sneakers if you're willing to lower your standards, but open heart surgery isn't available in discount stores.My husband and I buy our own insurance in hopes it will prevent us from losing our home in case of a large medical expense.Nearly all of medical procedures are expensive. Very expensive.

  2. Ebenezer

    November 11, 2012 at 12:34 am

    Health care is different from other goods. With other goods one can search the market and make more purcahses when price drops. But no one will go for two or more heart surgeries just becase cost for the procedure has dropped. With other goods one makes the decision but when it comes to healthcare most of the decision is made by the physician who then made the alternatives known to the patient if available. Also the bargain for good price is done by the insured’s plan administrator and not the patient directly. With ordinary goods, one can choose to go for low cost altrernative but for healthcare it is different, because the ultimate price that one can pay is his or her life.


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