Forget “Trickle-Down Economics” – it’s time for something new. Something I like to call “Backpressure Economics”.
Think of the way in which Wal-Mart operates, and the way in which you are able to pay about a buck and a quarter less for a box of cereal there than any other grocery store. Wal-Mart approaches a company, vendor, etc., and says “We’re willing to pay this much. That’s it. You want in, make it work.”
Now, I’m not a huge fan of Wal-Mart necessarily, but I will say that this model is exactly what the healthcare industry in this country needs, and why the public option is needed.
We need someone who can push back and start a “backpressure” effect on the cost of everything. Of course MRI machines are expensive. Of course medication is expensive. Etc, etc.
But…if there was someone saying to GE, “We’ll give you this much, not a penny more – make it work”, then GE would have to make it work.
And what that means is that they would, in turn, have to place pressure on their suppliers, saying “here’s what we will pay. That’s it.”
Which in turn places pressure on that company’s suppliers…and so on.
Right back down the line.
It’s not about artificial cost control – it’s about real-world cost control. Real market cost control.
If Chevrolet priced a Cobalt at $39k, do you think they’d sell any? Of course not. The market tells GM what it’s worth, solely by virtue of what the consumer is willing to pay for it.
And so it should be with health care. Why pay $3000 when you could pay $1500?
We bargain shop for everything else in this country, particularly when we’re in the midst of an economic crisis. So why shouldn’t people have the option to “shop around” for a deal on health care, instead of dangerously foregoing preventative or necessary treatment?
Like an engine, the current system needs a bit of backpressure in order to operate properly.
