Friday, October 05, 2007

If Texas can...

How to drive down health care costs, the Texas way (courtesy NY Times):
Four years after Texas voters approved a constitutional amendment limiting awards in medical malpractice lawsuits, doctors are responding as supporters predicted, arriving from all parts of the country to swell the ranks of specialists at Texas hospitals and bring professional health care to some long-underserved rural areas.

The influx, raising the state’s abysmally low ranking in physicians per capita, has flooded the medical board’s offices in Austin with applications for licenses, close to 2,500 at last count.

Now, have the applications for the bar decreased? :-)

Why does this drive down costs? 1. Supply and Demand: More doctors = More supply, demand is somewhat inelastic (doesn't increase too much as a result of cost) 2. Lower costs (malpractice insurance) for doctors passed on to customers via market competition.

Now how do we get more doctors in total? How do we increase supply? Maybe if there is less money to be made in the lawsuit industry there are some smart people that will want to be doctors....

Now, if we combine this with lower drug costs via negotiation and a reduction in prescriptions- maybe there is enough money to start extending health care to more people across the world.

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