For any good, there are a variety of people supplying and there are a variety of people interested in getting some of that good.  The suppliers each want to sell at as high a price as they can, and the buyers want to buy at as low a price as they can.  As suppliers and buyers bid for each others business, market prices emerge.

Each buyer finds the lowest price he can for whatever it is he wants to buy.  And so a buyer buys, say, a can of peanut butter for $2.89, or a gallon of gasoline for $3.15, or a used car for $2200, or a new house for $200,000.  These goods, and all goods sold on the market, have one important thing in common:  they are always sold at a higher price than the buyer would prefer.

Sure, sometimes you buy something and you think, “What a great price!” but the truth is that you would prefer a lower price.  Sometimes, for particularly expensive goods, people get the idea that a given price–the best price they can find–is unfair.  And so politicians love to campaign on promising to “do something” about high prices.  And it is here that it becomes difficult.  Because tampering with prices will always produce certain predictable reactions.

If a market price is artificially forced down by government, there are a vast number of ways that this can be done, but there is only one possible outcome:  as the price is forced down, less people will be willing to sell the good and more people will be willing to buy the good, leading to the forced exclusion of some people in the form of shortages.

And so forcibly lowered prices will inevitably produce shortages of treatment.  With a simple and insignificant product like cheeze whiz–I know, it’s probably more significant and complicated than I know, but bear with me–for cheeze whiz, this will simply mean that a lot of the time you won’t be able to get your hands on any.  For more complex products like the complex and expensive set of goods we call healthcare, this shortage may manifest itself in a number of ways.  Some people who come to buy healthcare goods may be turned away.  Some people who come to buy may be forced to wait into lines that are long enough to force some people to either give up, find illegal treatment, or die.  And some people will simply be given less healthcare product than they would prefer to buy:  either in the form of less medicine, less medical attention, less time in recovery, or what have you.

The shortage may manifest itself in a number of ways, but it will manifest itself.

In the case of this recent healthcare bill, we have massively complex legislation the final aim of which is to reduce the burden of healthcare prices.  And in just the very short time we’ve had it, it’s produced shortages.

For example, there’s the recent shut-down of 60 hospital building projects because their methods of providing treatment was considered too fancy by the current legislation.  That is, these 60 hospitals were doctor-owned, and planned to produce a higher quality, and therefore higher price, of care than is now legal.  Under the current anti-doctor-ownership laws, some other hospitals are prohibited from adding new beds.  That’s right.  A law which we were told would help is is outlawing the production of new hospitals and beds.  Of course, the patients (many upper-class) who would have slept in those beds and gone to those hospitals will now be forced to compete against the average or below-average Joe in the average hospital for treatment.  That’s neither good for the upper-class patient nor average-or-below Joe.  And this, of course, produces shortage.  If you thought the competition of the free market was brutal, you should see the competition for needed services when government forces prices and supplies down simultaneously.  People are people, and people with lots of extra money will bribe doctors to give them treatment preference.  And then instead of having to deal with more expensive treatment, the poor and the honest will have to deal with the possibility of no treatment.

Another example is the developing doctor shortage.  Estimates say there could be a shortage of perhaps 150,000 doctors developing over the next 15 years.  And because in the U.S. we have about one doctor per 310 people, this equals about 46 million doctorless patients.  Of course, we could either have 46 million people without doctors, or, more realistically, spead the doctors around so that everyone is partially doctorless.  This is a natural side effect of over-regulation and price shortage controls:  people draw away from government-manipulated markets.

On top of this, we’re all being forced to buy insurance.  Just another example of legislation distorted the normal operations of the marketplace.