Friday, December 22, 2006

Do Oil prices affect Healthcare cost?

Here's a thought: Rising energy prices and this country's sheer dependence on imported oil are causing healthcare costs to rise.

I'm reading a book by Stephen and Donna Leeb, The Oil Factor: How Oil Controls the Economy and Your Financial Future, that talks about the negative effect rapidly rising oil prices can have on our nation's economy. Since 1973, which is after the U.S. stopped being able to produce a majority of its own oil supply (the book explains), the nation's economy has been negatively affected by any rapid rise in the cost of the barrel of oil above 80% compared to the price a year prior. We can see such a rise before the tech bubble burst in 2000. Unfortunately, Uncle Sam is a sick patient, and his doctor does not believe in preventive medicine. The country is entering a precarious position with rising oil demand around the world, especially with the rising economies in China and India. The pace of oil production will not be able to keep up with the coming demand. And no amount of warring in the Middle East will fix this problem, as we have seen.

So how does this affect healthcare costs? Well, everything that needs to get somewhere needs oil. Vaccines, medical supplies, medications -- part of their cost is contingent on the price of transporting these items to their destinations (i.e. doctor's offices, hospitals, etc...). Then, all of the locations use energy to keep themselves up and running. With the rise in technology, our dependence on energy has also risen, due to electronic prescribing, electronic records, electronic medication management in hospitals, etc..... The nation's healthcare system is in just as a precarious a position as the nation's economy because of our dependence on oil as our primary energy source.

So here's my proposal: Instead of continuing to try to cut reimbursements and adversely affect the quality of healthcare in this country, the White House and Congress should focus on cutting our dependence on imported oil for energy consumption and encourage the development of alternative energy sources. This will help keep inflation in check. It will keep consumer prices down, as everything is affected by the rise in oil costs. And it will subsequently result in a better control over rising healthcare costs than the nit-picky cost-cutting, claim rejection strategies of health insurance plans, and Medicare's yearly threat of reimbursement reductions.

Let's reduce our dependence on oil, and keep the quality of healthcare where it is. Let's fix Uncle Sam before he goes into renal failure and needs dialysis. The most prudent life-sustaining measure for this country right now, faced with a burgeoning population of retirees requiring ever-more expensive healthcare (and consuming more kW hrs of energy per year), is to develop and promote alternative energy sources, such as nuclear power, wind energy, and liquified natural gas. Maybe we should start driving cars that run on clean-burning corn oil.

Energy should be the singular most important issue this country focuses on to reduce the cost of Healthcare.
Everything else is just wagging the dog.


Blogger The Independent Urologist said...

You raise some good points. People often say that medicine is recession proof, but as you clearly know, that is BS. Just like most industries and most "little guys", not the super-wealthy--we get swept up in rising oil prices and all that brings.

10:23 PM EST  
Blogger Medicine Man said...

The question is how do you respond as a business owner? Do you raise your rates as most businesses will raise their products prices to match the rising cost of living and keep their profits up? Whereas, I've seen my reimbursement rates fall with certain insurance plans, I struggle with increasing my own private pay rates out of fairness to the medical consumer. Where do we strike the balance? As you say, doctors and medical services are just as subject to oil price increases as everyone else.

7:40 PM EST  

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