Supply and Demand Article Review: "Health Care: Why Costs are so High."

A detailed Summary of Supply and Demand Article Review: "Health Care: Why Costs are so High."

Carbaugh, Bob. "Health Care: Why costs are so high." [Online 2 Jan 2006]

http://www.cwu.edu/~carbaugh/Health%20care%20costs.htm

According to Bob Carbaugh's article "Health Care: Why Costs are so High," the supply and demand for health care operates upon different principles than other goods and services. Normally, when the price of a standard good such an orange goes up, people buy fewer oranges. A demand chart for oranges would look like this:

Price of Orange: 20 cents-Consumer demand (d) 5 oranges

Price of Orange: 40 cents-Consumer demand (d) 2 oranges

Price of Orange: 50 cents-Consumer demand (d) 1orange

When the price of oranges goes too high, a consumer could also always substitute goods such as apples or grapefruit, at a lower

Conversely, lowering the price of insulin will not make non-diabetics wish to buy more insulin. The more inelastic the demand of a good or service, the higher the incentive there will be for the provider to charge a high price. After all, if people had to buy oranges no matter what their circumstances, wouldn't it make sense to charge, for example, a dollar an orange, even if the provider could make a profit off a twenty or fifty cent orange?

Another factor that affects health care demand, regardless of price is that most people do not pay for health care but are dependant upon private insurance or the government to pay for these expenses. This can result in people availing themselves of excessive health care services if they have good insu

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Approximate Word count = 505
Approximate Pages = 2 (250 words per page double spaced)

Category: Politics

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