Tuesday, June 14, 2005

Take the Bus to the Clinic

Imagine, if you will, how our society might be different if all public transit was free. No charge. Nada. Zip. There are certainly enough compelling reasons to provide universal transit service. Smog. Non-renewable resources. Utilization would go way up. Waiting times for available space would grow. The fees currently being charged on most public transit systems don't cover costs, so we can't argue that ridership fees support the economic viability of the transit undertaking. So what is the real reason for these fees?

There is a simple reason to charge a small amount to ride transit: it dampens, and therefore makes more predictable demand for service. No charge, unlimited demand. Unlimited demand, no ability to control costs. Dampening demand is very important when supply is relatively inelastic.

The very same logic has to apply to health care. A modest fee will dampen demand. It's a pragmatic reality.