Depending on one’s political leanings, the term “supply-side” evokes cheerful images of free market prosperity or gloomy visions of corporate greed. Either way, it probably does not immediately present itself as a basis for health care reform. Nonetheless, Josh Hendrickson suggests that a supply-side approach may offer a cure for the ills of our medical delivery system:
What is missing from the [health care] debate is a discussion of supply-side reforms … The system merely needs to reduce inefficiencies and realign incentives on the demand side and the supply side.
This is probably a tad too simplistic, and some of Hendrickson’s assertions are not likely to endear him to the physician community:
The supply-side is riddled with inefficiencies. For example, the supply of doctors is restricted by licensing and medical school enrollments. Physicians also often act to exclude substitutes such as physician assistants and nurse practitioners.
This controversial allegation notwithstanding, the supply-side argument does offer food for thought. Despite a twenty-year campaign by “progressives” to discredit supply-side economics, it was actually pretty successful in reversing the stagflation that characterized the 1970s.
So, maybe health care reform should take a walk on the supply side.
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