Health Care Supply

Dave Chase makes an argument in his book The Opioid Crisis Wake-Up Call that healthcare has a substantial supply side drive, not just a demand side drive. This argument doesn’t align with standard pictures of healthcare, the idea that people seek care when they are sick, and don’t use care when they are well. Its troubling, but evidence does support the idea that the healthcare market is in some very important ways a supply driven market, meaning that as supply and capacity increases, demand also increases.

 

I’m not completely sure I understand this idea, but it is important for us to acknowledge and think about, especially if we live in growing cities, gentrifying regions of the country, and areas of the United States that have real opportunities for reinvention. When looking to the future of healthcare in the United States, Chase includes many elements from Bruce Katz and Jeremy Nowak’s book The New Localism and thinks there is an important role for new models of city and local government to play in shaping local healthcare ecosystems. He is also heavily influenced by Jim Clifton’s book The Coming Jobs War and the importance that local communities invest in sectors that are likely to be highly productive in the future. Chase writes,

 

“Sooner rather than later, we can expect other developments along the same 3.0 spectrum [More info on Economic Development 3.0 here]. Cities will incorporate true health needs into mater planning and review building permit applications with a deep understanding that health care is a supply-driven market. The more supply there is, the more demand will increase, with little regard for value and community well-being. Approving more health care build-out virtually guarantees a massive burden on local citizens.”

 

It is important that we think about what it is in healthcare that actually provides value. If simply adding more healthcare capacity will lead to greater demand and utilization, then we need to take steps to ensure that an uptick in services is actually accompanied by improvements in health. When communities are redeveloping and growing, they should be focused on upstream social determinants of health rather than just hospitals and healthcare service buildings. Designing communities that will have ample green space for outdoor activity, that will control noise, and will have well lit parks and outdoor areas will help build healthy communities. Plopping a hospital in a space that doesn’t include these elements might give people a place to go when they are stressed, overweight, and injured by debris in the streets, but it will not help people actually live healthier, it will capitalize on a broken environment that fails to support health.

 

I think that is part of the idea that Chase argues for. We should maintain the healthcare capacity and services which actually improve health, and we should be weary of systems that provide healthcare but fail to demonstrate real health improvements for citizens and communities.

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