Posted by
Conrado Brenna on Sunday, September 13, 2009 7:06:26 PM
It is important to
analyze the differences between costs and prices. Costs are the time or
resources that could have been put into another activity instead of the one
that has been performed, while prices are the actual amounts of money people
are going to pay for a certain product or service. According to President
Obama, the “cost” of healthcare in America will significantly decrease.
However, the cost will keep being the same. For instance, the time put into the
research to find a cure for a certain disease will be the same, as well as the
time put into manufacturing certain medications will be the same. In other
words, the right word for President Obama’s phrase would be price. Let’s
thereby analyze what would happen if the government controlled the prices
or certain medications. First off, as it has been explained in the latter
phrases, the cost for creating and manufacturing certain medications will be
the same. In this case, the only difference would be that the amount of money
given to those researching would be lower, making their research less effective
and shorter. In other words, it would be fairly hard to get new medications out
in the market if these were government controlled. Secondly, less medications
would be offered, since less profits would be made by those selling the
medications causing their stocks to drop significantly. Therefore, it would be
hard to find any medications at all, because their stock would run out quickly
no more would be supplied in a short period of time. Thirdly, the quality of
these medications would drop significantly. With small profits, the
manufacturers of medications would invest less into their quality and make
their products cheaper. All in all, the scheme of government lowering the
prices of medications will delete all of the incentives to create, sell and
invest in new medications in the long run.