A man is suddenly struck by a heart attack and lies dying in the street. A crowd of people begins to gather in hopes of helping him. Then, one of them naturally shouts: "Can't you see a man is dying?!? Quick! Someone call a health insurance adjuster!"
Does the above scenario sound ridiculous? Of course it does, because it is. But it sadly mirrors the biggest problem that arises every time a politician or policy "expert" talks about health care in America: They almost always confuse things and turn it into a discussion about health insurance.
In his otherwise triumphant speech to Congress Tuesday night, President Trump did the same thing. He spoke all about coverage and risk pools and making sales across state lines. And he conflated better insurance choices with better care. It wasn't unexpected, because this is where we are in America right now, but it was still a disappointment.
Because no matter how great a job the government or even the private sector does in fixing our insurance coverage issues, that effort is not going to make a real dent in health care costs or provide people with better care. The only way to do that is to focus on something President Trump the businessman must surely understand: The law of supply and demand.
Just like everything else that can be bought and sold, the price and availability of health care is dictated to by this basic economic rule. So let's look closer at how supply and demand is affecting health care and health care costs in America and consider an idea or two on how to fix them.
Simply put, regulations and monopolistic practices are choking off supply at the worst time. Obamacare and the aging of America have boosted the demand and at least perceived access to health care by massive levels. We have millions more Americans who now expect care, so where are the new hospitals, doctors, nurses, and drugs to treat them?
The supply problem all starts with too stringent entrance requirements and sky high tuition prices for U.S. medical schools. Why any hard working American kid skilled in the sciences would choose medicine in the first place compared to the much faster path to riches in tech or quant investing is really a mystery already. The result is America's hospital residency programs can't even fill all their slots with the existing pool of U.S. medical school graduates year after year.