Basic economics: What happens when demand outraces supply?

Yesterday, we posted: Has ObamaCare provided more healthcare?

On cue,  WSJ ran a complementary op-ed by Sally Pipes — a healthcare policy expert: Medicare for All Could Mean Doctors for None.

Pipes’ fundamental conclusion:

Everyone would have coverage, but that’s not the same thing as care.

More specifically:

Patients would have to compete for appointments with a dwindling number of overloaded and underpaid doctors.

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Here’s the logic and facts that underlie Pipes’ conclusions…

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According to Ms. Pipes…

Currently, Medicare reimburses doctors about 25% less than private insurance companies.

Under the current legislative drafts of Medicare for All, government rates over the first decade would be 40% lower than those paid by private insurers.

That amounts to an enormous pay cut for doctors.

U.S. physicians earned on average $313,000 in 2019.  That compares to $138,000  for an average physician in the U.K.

American general practitioners earned a little more than $218,000 on average in 2016, compared with $146,000 in Canada and $134,000 in the U.K.

The logical conclusion: “Drastic pay cuts would inevitably drive physicians to give up the practice … and would discourage young people from entering the profession.”

One report from FTI Consulting concluded that Medicare for All would reduce the projected number of U.S. physicians in 2050 by about 44,000, including more than 10,000 primary-care doctors.

Demand goes up, supply goes down.

The certain outcome: an overloaded system that  makes access to doctors more difficult.

Or, as Ms. Pipes says:Everyone would have coverage, but that’s not the same thing as having healthcare.

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