Yesterday, Dave Thompson made a great argument about the inherent flaws in the Democrats’ plan when he explained the difference between lowering the price of health care and lowering the cost of health care.

The way Dave made his case is that he highlighted the fact that prices would drop if Congress passed a law that set the maximum price of a gallon of gas at $1 a gallon. He rightly said that the maximum price of a gallon of gas would drop to $1 a gallon but that wouldn’t mean that the cost of a gallon of gas would drop a penny.

In a capitalist society, which President Obama appears determined to change, operating at a loss can’t be sustained very long. I’d suggest, in that environment, oil company executives would shut down production rather than attempting to produce oil at a loss.

Dave also argued that we should eliminate the vast majority of government mandates for health insurers and health care providers. His DFL opponent argued that we need regulation, which is true to an extent. I’d argue, though, that mandates and regulations aren’t the same as oversight.

Regulating something simply means that government is setting the law by what health insurance companies and health care providers can do. Oversight by properly informed legislators can actually ask health care providers about adherence to or development of best practices. All the regulation in the world won’t inspire consistently developing new best practices. Rigorous oversight potentially can inspire developing new best practices.

What government bureaucrat tucked away in the recesses of the HHS building spends time rigorously questioning best practices? I’d bet none. If a legislator is told by his constituents that constant oversight of health care best practices was a priority, it’s a good bet that they’d get that legislator’s undivided attention pretty quickly. If the legislator didn’t take their demands seriously, the people could remove that legislator at the next election.

BTW, rigorous oversight of best practices means health care consumers would get the greatest value for their health care dollars, something that everyone thinks is important.

UPDATE: Welcome to HotAir readers. I’m all over the health care reform issues on a daily basis. I’m working on another post that will give everyone serious pause about the reforms.

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2 Responses to “Cost vs. Price”

  • Walter Hanson says:


    I heard this thing called Lasix surgery. Doctors do commercials for them wanting people to do it. Over the years price has come down.

    I wonder why. I suppose it has nothing to do with the fact that this isn’t mandated in health coverage unlike a million other things.

    Walter Hanson
    Minneapolis, MN

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