5-26-14 – Vermont Legislator Calls for Repeal of the Law of Supply & Demand

Posted by Rob Roper

There has been some controversy of late over ClearChoice M.D. opening a string of urgent care centers around Vermont. The idea behind these centers is to provide care to citizens with less wait time and less cost than a trip to the emergency room. Great! Who doesn’t want that?

Turns out the Chairman of the House Healthcare Committee, Rep. Mike Fisher (D-Lincoln) doesn’t want it. In fact, Fisher is so hostile to the idea that he proposed legislation that would require ClearChoice M.D. or even more alarmingly any doctor wishing to hang out a shingle, to get a Certificate of Need (CoN) — special permission from the government — in order to exist.

In a recent article by Vermont Watchdog, Fisher explained his thought process, “I think there is an argument for it [doctors being required to get a CoN]. The certificate-of-need process is a way for us to prevent over-building and increasing system costs.” (emphasis added.)

Has Rep. Fisher ever cracked an economics text book? A surplus of anything – “over-building” — reduces the cost of that thing. It does not increase the cost. Scarcity increases cost. This is why when a drought in Brazil means 11 million fewer bags of coffee are produced, your morning trip to Starbucks becomes more expensive. Or why when dairy farmers produce way more milk than people want to drink, the government starts giving away tons of free cheese.

The best thing Vermont could hope for to solve our healthcare problems would be a rush of doctors into the state competing for patients. The increase in the supply of medical care would lower costs. Competition would increase quality of care. Instead, we have politicians in charge of the system who are actively working to put more obstacles in the way of doctors coming into Vermont.

This is not smart or well informed policy. No lawmaker, however big their ego, can repeal the laws of supply and demand.

– Rob Roper is president of the Ethan Allen Institute

{ 8 comments… read them below or add one }

Mark Donka May 26, 2014 at 11:39 pm

It’s called competition, it works in free markets. It does not work in a Monopoly. Wake up Vermont.

Reply

Dick Tracy May 27, 2014 at 1:16 am

The Left’s misguided belief in the State and centralized control (read: Power) is evidently boundless.

Reply

Patty Donnelly May 27, 2014 at 1:46 pm

I spend over an hour to travel to Dartmouth to see a primary care doctor, the best I could due in Rutland is be put on a wait list which was at least a year long, due to the shortage of Doctors in Vermont. There was one doctor taking patients, however, you need to pay $2,000 a year just to be a patient. Not a credit for care, simply a payment to have a doctor. Vermont regulations have already created a shortage of doctors and now some idiot wants to make it even worse. Wake up folks, things need to change in Montpelier. It truly is becoming a matter of life and death.

Reply

Patricia June 1, 2014 at 3:44 am

The $2000 is for concierge doctors. For that money, you have access to the doctor as frequent as needed. So, you only need catastrophic coverage, which might end up being cheaper. Look into other services like LibertyShare, MediShare, or Christian Healthcare Ministries, these are alternative ways of paying for Healthcare Coverage.

Reply

Lawrence G. Jensen May 30, 2014 at 1:12 pm

I am afraid that it is not as simple as the law of supply and demand. As it is today, the State of Vermont can get away with paying about 40% of what it costs to produce a nedical service for a Medicaid patient. Medicare pays about 70%. The amount that the medicaid and medicare patients do not pay is added to the charges paid by those with commercical insurance. This is called the cost shift. All the hospitals in Vermont are non-profit and therefore have to take every patient regardless of their ability to pay. Private, for profit businesses, like the urgent care service proposing to come to Vermont does not have to take everyone. They can reject medicaid and medicare patients and take only patients with private insurance. Therefore, they can deminish the pool of people onto whom costs may be shifted. This will force hospitals to charge even higher prices to cover the cost shift created by the government. Please note the difference between the cost of a service and what is charged for it created by the cost shift. If private surgery centers, diagnostic imaging and private labs pop up all over the state the cost shift solution to low reimbursement by the government payers will collapase along with the entire hospital system. Please note the doctors Patty mentioned who charge $2,000 just to have them accept you as a patient.

By the way, Patty. The CHCRR clinics in Castleton and Rutland are still accepting patients and have fine providers.

Reply

Bonnie S June 1, 2014 at 6:14 am

@Lawrence G. Jensen: You have just made the argument why the current system can never really work. Artifically limiting supply will never make costs go down.

Rather than government trying to run everything better than the free market, why don’t we try the Swiss model, where the government provides vouchers as a safety net to get everyone into the *free market* insurance system that reimburses *free market* providers? The good ones will survive, the poor ones won’t. Doing anything else is fighting economic reality, which is like fighting gravity. It wastes resources. With EMR, we now have the technology to track and quickly react to obvious signs of problems at individual practices.

Certificates of need are a scam needed to prop up government monopolies, because they can’t survive any other way. Limiting supply CAN NOT HELP the actual problem we have here. Insurance companies and doctors are being driven out of the state, compounding the cost escalation problem. It’s almost a year’s wait to get into the addiction program at the HowardCenter, I just learned, *and that’s a huge improvement* because they have a shorter waitlist now.

What do we need to fix the opioid problem, or any other health problem in Vermont? Many more trained professionals to work on it. You can’t do that by limiting supply.

Reply

Bonnie S June 1, 2014 at 6:17 am

“private surgery centers, diagnostic imaging and private labs pop[ping] up all over the state” is EXACTLY what we need. If your system will break under that pressure, than maybe it deserves to.

Reply

Keith Stern June 3, 2014 at 3:31 pm

The fact that liberals who have no concept of how economics work keep being elected in this country shows just how poor our education system is at teaching life skills such as basic economics and budgeting.

Reply

Leave a Comment

Previous post:

Next post:

About Us

The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
Read more...

Latest News

Scott Reiterates Opposition to Carbon Tax/TCI

November 15, 2019 by Rob Roper Vermont is one of a dozen states contemplating entering into a regional cap and trade scheme for gasoline and diesel, the Transportation...

Remington Arms Case

November 13, 2019 by John McClaughry Last Tuesday the US Supreme Court cleared the way for a lawsuit against Remington Arms Co. brought by survivors  of victims of...

Scott: Make Paid Family Leave Voluntary, Unless Nobody Wants It

November 12, 2019 By Rob Roper For the past year, Governor Scott has been making the good fight on Paid Family Leave in demanding any such plan be...

False Claims of Falsity About Vermont’s Business Climate

November 8, 2019 by Rob Roper In a recent “fact check” piece by Vermont Digger, the online news site nailed Governor Scott’s comment that Energizer Battery’s decision to...

Sen. Warren and Medicare for All

November 7, 2019 by John McClaughry Last week Sen.  Elizabeth Warren released the details of her Medicare-for-All plan. The Wall Street Journal studied her explanation and concluded that ...

Video