Health economists may be getting the supply-and-demand framework all wrong

Listen to Health Affairs Editor-in-Chief Alan Weil interview Dr. Adam Gaffney, a pulmonary specialist from Cambridge Health Alliance and Harvard Medical School, on how medical care use could change under universal health coverage.

Show Notes

Have health economists been underestimating supply-side constraints when making predictions regarding cost and utilization for universal health coverage programs, such as Medicare For All? That's certainly what Dr. Adam Gaffney, a pulmonary specialist from Cambridge Health Alliance and Harvard Medical School, and colleagues posit in a new policy paper published in the January 2021 issue of Health Affairs.

As Gaffney and co-authors note in their paper, "focusing only on the impact of health care reform on government expenditures is short-sighted." On the supply side, there's a natural limit to doctor and nurses' time as well as the number of hospital beds in a given facility.

Their analysis suggest that while first-dollar universal coverage expansion would increase ambulatory visits by about 7-10% and hospital use by about 0-3%, modest administrative savings could offset the costs of these increases.

On this episode of A Health Podyssey, Alan Weil and Adam Gaffney take listeners through health reform economics 101 before sharing the implications of the paper, ultimately questioning whether health reform is too focused on a demand-side framework.

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What is A Health Podyssey?

Each week, Health Affairs' Rob Lott brings you in-depth conversations with leading researchers and influencers shaping the big ideas in health policy and the health care industry.

A Health Podyssey goes beyond the pages of the health policy journal Health Affairs to tell stories behind the research and share policy implications. Learn how academics and economists frame their research questions and journey to the intersection of health, health care, and policy. Health policy nerds rejoice! This podcast is for you.