For decades, members of the medical profession have exempted themselves from the direct relationship between supply of service providers and the fees they can demand. Across the twentieth century, as the number of doctors has increased, their incomes have also increased. The only challenge that their burgeoning numbers posed was that of finding enough disease to keep everyone busy. In other words, doctors have gone looking for business. In Maine, for example, a dramatic increase in back problems requiring surgery occurred after that state experienced a large influx of neurosurgeons.
Hospitals play a similar game.
Bed capacity, not medical necessity, is the most important factor influencing hospital utilization. Applying a similar economic model to the automobile industry would suggest that if Ford had only manufactured more Edsels, they would have been more popular. We have literally hundreds of hospitals that aren't needed given current levels of need, thereby fostering redundant services that consume precious resources needed elsewhere. Richard D. Lamm, former governor of Colorado and current director of the Center for Public Policy and Contemporary Issues at the University of Denver, remarks, The most health-producing ethical decision many American hospitals could make would be to close their doors or merge. Historically, in America, the more plentiful healthcare becomes, the more expensive it gets.