Say’s Law , discussed in college-level economics is often summarized as “supply creates its own demand.” In recent years this notion has been applied in health care. For example, a provider who buys a pricey new CT machine may be more likely to find reasons to use it. In general –because of examples like this– I tend to believe supply does create its own demand in health care.
But one thing stands out for me: the limitation of doing this and other cost/spending analyses using just Medicare data. Sure Medicare is the biggest individual spender and the data are available, but should we really ignore the whole private market?