| This question <82|78> overall <73|75> Frankel: <467|123>. |
| Question 157: Describe a situation in which something which was not produced as a commodity is converted into a commodity through the exchange. |
| [74] Frankel: An example of something which was not “produced” as a commodity but has been converted to one as a result of the exchange process is healthcare in the United States. Basically, in our nation today x-amount of insurance is equivalent to y-amount of healthcare. This is a tragic result of a system which does not normally function under any of the assumptions of Neo-Classical economic theory being forced to try and operate as if it did. |
| The amount of healthcare received acts as a function of the amount of insurance rendered. Hence Y = f(X). Y is completely passive, individuals will not receive healthcare in today's market without insurance or the ability to pay excruciatingly high prices. Prices that the average person in the United States might not be capable of paying. For example, two weeks after I graduated high school I was involved in a motor vehicle accident. After being life-flighted to the University of Utah hospital and kept alive on life support, the medical staff at the University refused to proceed with further treatment until they were able to confirm my insurance coverage thru my parents and have them sign off on any liability the hospital might incur while treating me. I was in a coma with a pulse that was too weak to initially detect and yet the hospital refused to supply healthcare (Y) until they had determined the amount of insurance coverage (X). |
| The problem, first and foremost, with trying to force healthcare to act as a function of insurance in the Neo-Classical economic system is that it lacks virtually all of the needed characteristics to be a commodity. Healthcare services and suppliers do not in any way produce products or services that are equal. Incredibly asymmetrical information and knowledge exists, giving the providers an extreme advantage. Perhaps worst of all, we count on our doctors to act as our agents and advocates, most people lack the education to know exactly what services and/or medications they require to be healthy. In the Capitalist system, however, the doctor is financially rewarded for ordering the patient to go thru tests, take medication and make return visits that are unnecessary. This is because doctors are paid for the amount of services and time provided and yet due to insufficient information, the patient often times has no choice but to trust the doctor. This is just one example of what is driving ever increasing insurance premiums that keep healthcare out of the reach of the citizens who need it most, the poor. |
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