With the current gas price brouhaha underway, more people are gaining a basic understanding of the relationship between supply and demand on one hand and prices on the other.
It’s pretty simple, really. If growing demand outstrips supply, prices go up. More supply than demand forces prices down. Various groups of people, however, have pretty transparent reasons for not wanting to understand this.
Given that government is paying more than ever for health care, however, it seems odd that one organization that would be trying hard not to understand this most basic economic concept would be Kentucky’s Cabinet for Health and Human Services. They have become cheerleaders for economic illiteracy with the odd claim that limiting the quantity of healthcare providers “prevents the proliferation of health care facilities, health services and major medical equipment which increases the cost of quality health care in the commonwealth.”
This ridiculous policy is called Certificate of Need or, more appropriately, CON.
The CON’ers would do well to read this.