Saturday, November 2, 2013

Capacity Will Leave

If you leave, I won't cry
I won't waste a single day
But if you leave, don't look back
I'll be running the other way

Axiomatic to economics is that price ceilings, i.e., market interventions that restrain price, drive supply from the market. Price controls, regulations, and other hampering mechanisms reduce incentive for producers to produce.

Some suppliers merely cut back on production. Other producers leave the system. Entrepreneurs thinking about entering the industry look elsewhere for opportunity.

Escalating reports of hospitals, docs, and medical supply makers withdrawing from the health care system governed by Obamacare should therefore not be surprising. The regime's price controls and stifling regulatory burden will drive capacity from the system.

The consequences for healthcare consumers under Obamacare: higher prices, lower quality, reduced access, and shortages.

1 comment:

dgeorge12358 said...

John Galt is Prometheus who changed his mind. After centuries of being torn by vultures in payment for having brought to men the fire of the gods, he broke his chains—and he withdrew his fire—until the day when men withdraw their vultures.
~Ayn Rand, Atlas Shrugged