Goods vs. Services

Supply and demand curves react differently to an item depending on whether it is a good or a service. Typically, if I have a demand for a particular item, then if that item's price to me is zero, I will consume as much as I want of that item and even over consume that item.

I stipulate "have a demand for" because there are some things in this world for which there exists no demand. None, absolutely zero, you can't give it away. Say, dog poop, for example. I have quite the supply, but can't seem to find a demand for it. Hmmmm, I wonder why not...

Anyways, if a good is free to me, my only limitation on consumption or amassing great quantities of said item are physical limitations. Do I have enough space to store it? Is my stomach big enough to hold it? If I bought you the universe, where would you put it?

If a service is free to me, my limitation (other than can my body withstand the service) is time. In the case of medical care, I'm pretty much limited to one procedure at a time - messy things happen if you try to stick me in two MRI's at the same time.

Time is also the limiting factor on the supply side; in medicine, for example, the doctor can only see one patient at a time, the MRI can only scan one patient at a time, the phlebotomist can only draw one person's blood at a time. The exception to this is the Biomed Tech that can tell multiple people that they are wrong at the same time; we are special....

So, only so many doctor visits, procedures, scans, etc, can be done per hour/day. Even with 24/7 coverage, there is a time limit to the amount of medical service that can be provided. After 24/7 coverage, the only way to expand capacity is to add more doctors, equipment, medical staff, and hospital rooms.

And we are currently experiencing a doctor and nurse shortage in the United States. I've experienced this recently - my wife was going to have to wait three or four days for an appointment with a neurologist. Since she works for a doctor, she had her boss pull some strings and got seen that very day.

My point is that waiting for an appointment is the natural outcome of a service shortage. I see this at the VA I work at in the MRI department where patients have to wait a month or more for that "free" MRI.

See, the government will have two choices in providing health care for everyone: Deny it or extend the wait time. Expanding the medical work force isn't an option unless the government is planning on forcing people to become doctors - yeah, that's the guy I want diagnosing my illnesses.

Nope, you have to get in line; for an example of this, we only have to look north to Canada, where the average wait time for an MRI is 10.1 weeks. Lucky for those guys they have the United States, where they can get right in if they pay their own money.

Most of the complaints that I've read about wait times in the United States are related to seeing one particular practitioner or facility (Mayo Clinic, anyone?), whose reputation commands more of a demand. If a person were to shop around, they are sure to find a practitioner that can see them sooner with care that may or may not be as good as the preferred service.

And finally, with services that are perceived to "free" or "free to me", demand rises (as long as a demand exists in the first place.) I provide this blog free to anyone who wants to read it, but I still haven't seen a huge demand for it.

Let's look at an example. Recently, I went to the doctor because I had a sniffle. In the past, head colds like this one have descended into my chest and caused a month long cough. Since I'm going on vacation and A DOCTOR'S VISIT ONLY COSTS ME $20 (note the emphasis there), I decided to see the doc, get some drugs, and nip this thing in the bud.

An aside, no, I wasn't able to see MY doc, but I did get to see A doc in the same office the same day I called for an appointment.

So, let's say that the same Dr. appointment cost me $200 instead of twenty; how willing would I be to be seen for a little cold? Not very willing, I can tell you, even with my history.

See, that's the problem (and I'm part of it), right now, insurance artificially lowers the cost to me for my health care; if the cost drops to the floor, I have all the more reason to put a bigger demand on the medical care system because it doesn't (directly - well, at the moment of service) cost me anything.

I'd go for every single sniffle, bump, bruise, headache, hangnail, scrap, and malady - real or imagined. Ok, maybe I wouldn't, but you know there are people who will, and our already overtaxed health care system gets slammed with a huge increase in demand to which the government's response will be of necessity either No or Wait.