In 2012, perhaps the most widely scrutinized sector of the economy in North America will be the health care industry. Politicians, policy analysts, academics, and the public share concerns about the state of health care in both the United States and Canada. However, each of these constituencies has a different perspective.
Most sectors of the economy are characterized by a supply side that focuses on minimizing costs, expanding sales, and maximizing profits and a demand side that considers consumer preferences, incomes, and alternative purchases. Markets use prices to link supply to demand. Health care is very different.1 In the mid-20th century, patients' aversion to the risk of large health care expenses gave rise to a market for insurance, thereby separating patients from the true costs of care at the point of service delivery. This in turn greatly expanded demand for health care, resulting in cost escalation, which gave rise to government involvement in many ways (eg, tax subsidies, US Medicare, the Canada Health Care Act, and, most recently, the US Affordable Care Act).
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JAMA: 2011-12-14, Vol. 306, No. 22, Author Interview
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