I read the other day that the Madison, Wisconsin bus system is surprised that ridership decreased when they raised the fare price. I guess a lot of people were surprised, just like they were surprised when people drove less when the price of gas went up, or that more revenue came into the Federal coffers when taxes were cut under President Bush.
In Madison, which is ideologically predisposed to love mass transit, ridership is still pretty good. Many medium sized towns, however, have bus services that appear to the casual observer to run about 90% empty. The state, federal, and local subsidies for those few bus riders must be staggering on a per-ride basis, if anybody were to sit down to figure it out. And, buses are cheap to run compared to light rail systems which take billions to build, and even then don’t seem to break even without big subsidies.
But, rather than cut routes (it’s hard, due to public opposition) or, God forbid, reduce driver salaries (it’s impossible due to generous union contracts in many towns) they raise fares. As a result, other transportation options become more desireable.
I’m not an economist, but the impact that price has on things just makes sense to me because I know how I react. I go to fewer movies now that the price is above $7, for example. When the cost of heating our house goes up, I grudgingly wear a sweater and turn down the thermostat. When the price of gas is higher, I slow down to improve my miles per gallon.
By the same token, when things are cheap, or provided for me for free, I’ll take all I can. And, it’s not just me. See what happens at a wedding when there is a free bar. Then see what happens when it becomes a cash bar. It’s human nature to behave that way.
I wonder if the folks in Washington have factored human nature into the healthcare bill. I think they’ve done just the opposite. At our house we have a Health Savings Account currently. We pay a huge deductible, and pay lower monthly insurance rates as a result. We don’t seek any more healthcare than we need. We don’t deprive ourselves of necessary care, but we’re prudent with our healthcare money, because it’s coming out of our pocket. But, if there’s something big, it’s covered by our insurance.
Not only will the new healthcare plan make policies like ours illegal, it will, if I understand correctly, make care available universally and uniformly. There will be no disincentive to be prudent in seeking healthcare. I can imagine that the demand for healthcare will go up drastically, just like the consumption of beer at the free bar at the wedding, and costs to taxpayers will skyrocket beyond the trillion or so already projected. That’s what happened to Medicare.
And, the supply of doctors and medical professionals will not be nearly great enough to meet the need. The result can only be very long wait times for care — like in Canada — and perhaps rationing of care by providing only service that is life saving, or only providing service for people who meet some actuarial formula for their benefit to society after their recovery.
I’m all in favor of good bus systems, and I’m all in favor of a fair healthcare system. My preference would be to leave our current healthcare system mostly in place, pass tort reform, remove regulations that stifle competition in the insurance industry, and come up with a fund to insure people who are now uninsurable. But, that’s just me, and I’m not calling the shots.