Supply and Demand in Health Care


We are now at the stage in the COVID-19 Pandemic where we can look at the responses of different countries and the impact that different designs in health care systems have had on outcomes. Just like in our country Europe is experiencing a second surge of COVID-19 patients testing positive and in some places hospital beds and ICU beds are becoming stressed. In France nearly 9000 ICU beds will be used at the peak of the second wave—nearly 2/3 of the available beds in Paris and ½ the beds in the outlying 18 administrative regions. Germany and the Netherlands are experiencing the same stresses on their systems. Ares in our country in Wisconsin, South Dakota, Idaho, and Texas are also under stress and field hospitals are currently being deployed in Texas and South Dakota.

But we will never run out of hospital beds or ICU beds or ventilators in our country and our response is very different than in Europe because we have more options available to us in designing our response. And the main reason has everything to do with the clinical options that we have available to doctors, nurses, and hospitals because of our capitalistic system. No one in our country will be denied access to care because of inability to pay or denial of access. In the 1st COVID-19 wave in Europe many elderly patients had care rationed and they were triaged (care was denied) because of their age. This has never happened nor will it happen in our country. The UK Times last week offered that many patients over 80 and many over 60 with preexisting conditions were allowed to die but only 2.5% of patients in these categories were offered ICU beds or ventilators. Why?

As an Amazon Associate, we earn a small commission from qualifying purchases.

There are too few ICU beds in Europe and too few doctors and nurses. This is a direct result of a misallocation of scarce resources and personnel (doctors and nurses) that are leaving in droves for non-socialized countries where they can get paid better and work under better conditions. According to a study in the August Journal of Critical care in the US there are over 34.7ICUbeds/ 100,000 people. Here are the numbers for Western Europe: Germany—29.2, Belgium—15.9, France— 11.6, Spain—9.7, U. K. — 6.4, Netherlands—6.4. Like all command economies hospitals in Western Europe Socialized medicine systems operate under tight global budgets—exactly the same as OPTARs (Operational Targets) that government systems in the military, VA, and Indian Health services utilize in our country. Most doctors and nurses in our country work so hard for their patients that they don’t have a real understanding of the economics of medicine. Those fleeing Europe for our country do understand and if you talk to them they will relate to you horrific stories of their not being able to take care of patients in their own home countries the way we do in the USA.

In our country today where there are “hotspots” 27% of ICU beds in South Dakota are being utilized and 40% in El Paso. In our State that number is said to be 50% but that is not counting all the available beds in step down units, cardiac ICUS, pediatric ICUs and free standing surgical hospitals. In our State in mid- March we were told that we had 300 ICU beds and 3000 regular beds available—a factor of 10 less than the rest of the country—which I don’t believe. What I do believe is that in Idaho we will always be able to absorb COVID patients easily—in addition to everyone else who needs care.

It doesn’t matter what service, product or commodity one is dealing with the laws of supply and demand and pricing theory will allocate scarce resources better than government bureaucrats and politicians. The example of the early 70’s when Russian agricultural Commissars with central planning formulas saw millions of bushels of wheat go to waste because of price floors that were higher than the equilibrium prices or in Orange County California in the early 50’s when rent prices had artificial ceilings not allowing landlords to repair their properties causing values to crash. In our country in government run systems (VA, Military Medicine. And The Indian Health Services) just like in European socialized systems, chronic underinvestment and rationed care in ordinary times has led to underinvestment in ICU beds and labor (doctors and nurses).

Earlier this month as the pandemic was thought to be winding down doctors and nurses in Paris went on strike not just for higher wages, but for better working conditions. So let that be a lesson to those supporters of socialized medicine —no matter what they call it. Good medicine requires well trained providers, state of the art facilities, modern pharmaceuticals and medical consumables, supply chains that are responsive to customers’ needs and wants, and not to the algorithms of central planners…

We have the best doctors, nurses and health care system in the world. To make it perfect we have to remove symbiotic relationships between government and the private sector, require accountability of those in the private sector who are paid by government agencies (audits for providers), eliminate “up coding” and finally cut through the supply chain shenanigans that cost patients trillions of dollars every year.

Our health care system in the USA isn’t perfect. We can fix the problems. Would you rather be sick in the U. K. or France or in Idaho?

Don't use Facebook? More commenting options below (scroll down)

Leave a Reply

Your email address will not be published. Required fields are marked *