Most people who want to sell a used car understand that they are trying to maximize their revenue and that the market sets the price.
But go into health care costs and suddenly there is some mistaken belief that there is a "fair and just" cost unrelated to supply and demand.
Joe Lieberman, I-Self, brings this up when he says Medicaid and Medicare pay less than their share, driving up costs for people covered by private insurance.
Lieberman story
I guess if you had volunteers rolling bandages for free, and all of health care was non-profit, just trying to get by on the minimum for a charitable service, that may be true. But that Norman Rockwell image of the health care industry is just wrong.
If a hospital charges $52.75 for a plastic cup, it is because profits are maximized at $52.75. If they charged $52.74, they would earn less. If they charged $52.76, they would sell fewer cups.
In that context, the Medicare and Medicaid programs pour money into the health care system that increases demand. Because supply does not increase much (there are no homeless doctors looking to find work) then this demand pushes up prices.
If Medicaid and Medicare weren't pouring money into the system, then demand would drop and prices would come down.
This not only points out that Lieberman is using flawed logic, but underscores the need for the public option. We cannot solve the problem by fueling demand. We also need to make sure the money we do spend will go further. The public option is one way to do that. We also may need to do more.