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In economics, there is supply and there is demand. When growth in demand outstrips growth in supply, prices increase. When a price ceiling is put in place to restrain prices, the market usually encounters a situation where not everyone who can afford to buy can actually do so. Kaiser Health News reported on the general shortage of primary care doctors in the US, with an emphasis on Medicare patients' inability to find doctors. Medicare, while heralded as a success for elderly patients, typically pays less than commercial payers. Up until somewhat recently, many practices had to accept Medicare simply because of the number of Medicare patients. With supply not being able to keep up with demand, some practices have made business decisions to not accept Medicare patients.

In economics, there is supply and there is demand. When growth in demand outstrips growth in supply, prices increase. When a price ceiling is put in place to restrain prices, the market usually encounters a situation where not everyone who can afford to buy can actually do so. Kaiser Health News reported on the general shortage of primary care doctors in the US, with an emphasis on Medicare patients' inability to find doctors. Medicare, while heralded as a success for elderly patients, typically pays less than commercial payers. Up until somewhat recently, many practices had to accept Medicare simply because of the number of Medicare patients. With supply not being able to keep up with demand, some practices have made business decisions to not accept Medicare patients.

Some people have tried to portray greedy doctors as being the reason for the difficultly that Medicare patients have when searching for a new doctor. In reality, if commercial insurers pay significantly more than Medicare does, it can often be a very difficult business decision to continue to accept Medicare, especially when the average salary of primary care doctors is only about 80% of the average salary across all specialties (per the article). A more systematic fix would be to allow prices to adjust annually, allowing the under-compensated specialties to be paid more and hopefully drawing more doctors into the field (thus increasing supply).

Kaiser Health News published a piece on California's current Attorney General's battle against consolidation in the healthcare industry. Even before the pandemic, Northern California had already seen a lot of consolidation among its providers (clinics and health systems). The article reports that the pandemic has only accelerated the trend of consolidation as physician practices have seen very light patient volume. The article also referenced a Health Affairs article, indicating that "In 2010, about 25% of California physicians worked in a practice owned by a hospital. By 2016, more than 40% of doctors worked in hospital-owned practices."

Kaiser Health News published a piece on California's current Attorney General's battle against consolidation in the healthcare industry. Even before the pandemic, Northern California had already seen a lot of consolidation among its providers (clinics and health systems). The article reports that the pandemic has only accelerated the trend of consolidation as physician practices have seen very light patient volume. The article also referenced a Health Affairs article, indicating that "In 2010, about 25% of California physicians worked in a practice owned by a hospital. By 2016, more than 40% of doctors worked in hospital-owned practices."

Consolidation reduces competition, which ends up giving more power to the suppliers over the purchasers. The California Medical Association opposed a bill to grant the attorney general more tools to stop mergers, saying that the legislation, as written, is too broad and would including leasing and other contracting arrangements and also does not provide for a meaningful channel to appeal decisions. It is likely that the California Medical Association has good points here, as writing good laws can be very difficult.

In March, many hospitals cancelled scheduled procedures to make room for potential COVID-19 patients. Those cancellations, in conjunction with Americans' fear of getting infected at hospitals (and perhaps other reasons), have led to a dramatic reduction in hospital procedures. The Kaiser Family Foundation released poll results showing that about half of the public indicated that they skipped or postponed medical care because of the pandemic. It is perhaps not surprising, then, that CNBC reported that hospitals are collectively losing billions of dollars per month (the American Hospital Association estimates $50 billion per month). Such financial losses will undoubtedly have significant repercussions to hospital operations.

In March, many hospitals cancelled scheduled procedures to make room for potential COVID-19 patients. Those cancellations, in conjunction with Americans' fear of getting infected at hospitals (and perhaps other reasons), have led to a dramatic reduction in hospital procedures. The Kaiser Family Foundation released poll results showing that about half of the public indicated that they skipped or postponed medical care because of the pandemic. It is perhaps not surprising, then, that CNBC reported that hospitals are collectively losing billions of dollars per month (the American Hospital Association estimates $50 billion per month). Such financial losses will undoubtedly have significant repercussions to hospital operations.

Many businesses -- not just hospitals -- often run on thin margins and are not necessarily built to withstand large financial shocks. It is also unclear when society will return to "normal" or what "normal" in the future will look like. Coming out of this pandemic, medical care might look different from what Americans had gotten used to.

Inaugurated in 2019, the current governor of California had ambitions to change the landscape of health policy of the state, including expanding insurance coverage and even rolling out a white-label generic pharmaceutical program. As with many other states, the pandemic changed many plans. Kaiser Health News wrote about the current governor having to scale back the agenda that he had earlier promoted.

Inaugurated in 2019, the current governor of California had ambitions to change the landscape of health policy of the state, including expanding insurance coverage and even rolling out a white-label generic pharmaceutical program. As with many other states, the pandemic changed many plans. Kaiser Health News wrote about the current governor having to scale back the agenda that he had earlier promoted.

The pandemic -- in conjunction with the subsequent shelter-in-place ordinances -- has had a tremendous impact on state and local governments: not only are people working less (and the governments receiving less in tax revenue), but more people need financial assistance and are seeking out programs such as Medicaid or unemployment benefits. It would have been interesting to see how certain programs would have played out, but for now, one person quoted in the article summarized the current dilemma: "Do we invest in prevention when the house is burning down?"

As much as we would all like to think that the value of a human life is beyond measure, trade-offs are inherent in a system with limited resources, if for no other reason than the possibility that a few million dollars spent saving one person's life might actually be put to use saving more than one life elsewhere. The New York Times published an interesting piece that reviews different dollar amounts that the US government has used to value an individual's life: $885,000 (in today's dollars) in 1972 to near $9 million today. The piece also mentions The World Health Organization's guidelines regarding cost-effective treatment and touches upon the idea of a quality-adjusted life year (known in academia as a QALY).

As much as we would all like to think that the value of a human life is beyond measure, trade-offs are inherent in a system with limited resources, if for no other reason than the possibility that a few million dollars spent saving one person's life might actually be put to use saving more than one life elsewhere. The New York Times published an interesting piece that reviews different dollar amounts that the US government has used to value an individual's life: $885,000 (in today's dollars) in 1972 to near $9 million today. The piece also mentions The World Health Organization's guidelines regarding cost-effective treatment and touches upon the idea of a quality-adjusted life year (known in academia as a QALY).

To a large extent, today's public policy controversy about the timing of when to open up the economy has public policy implications that relate to the value of human life. Lift the restrictions too early, and more people may get infected and die. Lift the restrictions too late, and people may find themselves without ability to buy food and governments might not have enough tax revenue to pay for a number of social programs.