00:01
Here we're taking a look at the argument for market -based reforms when it comes to the united states health care system.
00:06
I've drawn for us a quick supply and demand curve of this market for medical services, and what we'd like to know is really what is this basis of these market -based reforms.
00:16
And to have a better idea of this, let's take a look at this graph, and we know visually that our equilibrium should sit right here.
00:22
So suppose that that's at a price of p -0.
00:25
But what happens in the united states right now is because a lot of our medical costs, are covered by either employers or government assistance, and this is due mainly to this affordable care act, right? it allowed greater government assistance when it comes to medical supplies or medical assistance.
00:42
So people's demand for medical assistance, medical services, has increased from d to d1.
00:50
And what we see that exists here is that not only has the quantity of medical supplies increased from q0 now to q1, but we also see that, that the price has increased from p0 to p1.
01:05
But what's interesting here is that even though the overall price of the services we receive has increased, the price that we as consumers pay has actually dropped.
01:13
And we pay at a value down here.
01:15
And this is due to this assistance that we receive.
01:19
So we're still getting the same quantity right here.
01:23
However, our price is much, much lower.
01:25
And the argument for these market -based reforms is that this shouldn't necessarily be the case.
01:30
Because looking at this, we see that this, the medical services market behaves very, very differently from any other goods and services market, which resembles a more competitive market.
01:42
So the argument for these market -based reforms suggest that we should adjust this model so that instead of consumers paying only a fraction of the price, we instead pay the actual equilibrium price, which would sit right in here...