Friday, January 17, 2014
On Price Controls in Singapore's Healthcare System
Yes, they exist but only pertain to hospitalization and long-term care. Doctor's visits and procedures are determined by the market and the reason that the prices are so low is the same reason that lasik eye surgery (which has gone from $5,000 an eye to as low as $600), plastic surgery, and full body scans have gotten so much cheaper in the United States - competition resulting from the fact that people are spending their own money (it is mandated by the government that people set aside 6% of their gross earnings every year into what we would refer to as a health savings account that would a) accumulate over time at a 4% interest rate and b) be used to purchase healthcare services) while providers are attempting to secure it (it is also mandated that doctors and hospitals not only disclose their prices but their success rates as well). It is a wonderful thing, this competition.
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The price controls involve hospitalization (room and board) but only to the extent that they regulate the number of affordable rooms that each hospital must have. And, while, yes, the government runs 70% of the hospitals, each of these hospitals in turn competes with the others and must make their prices and success rates public (it's part of their transparency policy). Regulations of this type I would welcome.............And, yes, President Hoover's wage supports made the depression much worse in that it drastically raised the cost of labor and made it infinitely harder to hire new people. When you increase the cost of something you get less of it. As far as price controls go, those invariably lead to shortages and should be avoided.
Will, I wonder if Hoover's wage and price controls created a sort of black-market of labor in which employers paid people under the table, off the record, in situations where the real value of the work was lower than the inflated level that the Hoover administration fulled from thin air...
Sort of like how minimum wage laws now force a lot of employment of illegal aliens.
I'm sure that that happened (along with all of the bootlegging from prohibition) big time.
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