Key econ lessons for the Healthcare Entrepreneur

Albert DiPiero MD

This is required for the healthcare entrepreneur, from the world-renowned economist, Tyler Cowen: “One of the worst tendencies in American politics is to restrict supply and subsidize demand. (The phrase is from the economist Arnold Kling.) The likely result of such policies is high and rising prices, restricted access and often poor quality. If you limit the number of homes and apartments, for example, but give buyers subsidies, that is a formula for exorbitant prices.”

The same applies - in spades - to healthcare. Buried in here is also the provocative, contrarian view that focusing on “increasing access” is not the Holy Grail that many make believe. This is one concept we learned from years of hard business reality knocks. What happens when we subsidize healthcare but then greatly restrict who can deliver care and in what setting? The converse also implies: what happens when we open the path to innovation, creativity and growth? As a life-long believer in the power of innovation, I recommend this to the healthcare entrepreneur: understanding the nuances and examples of this concept will help you craft worthy businesses that also get at the heart of the healthcare trap.

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