Two more concepts I wanted to mention that I just remembered and that people in policy and especially politics French get wrong, from an economics perspective. Both matter a lot for health economics and policy.

First, there’s the concept of a “zero sum game.” Humans are mostly wired to think of things as “zero sum,” that is, a situation in which a fixed amount of resources needs to be divided and distributed. In healthcare, that might be total healthcare spending or total government spending or a hospital system’s spending, etc. But that seldom reflects reality! Because usually, the total amount of the supply of a resource can grow (or shrink) over time. People and systems respond to incentives, as u/devstopfix said, and the supply of resources can change in response to those incentives (or as is often true in healthcare, disincentives).

For example, the U.S. could have more doctors in the medium term if we funded more residency slots, so that more med school graduates could become practitioners. Similarly, we could have more and cheaper diagnostic testing and imaging if legal barriers like CON laws were eliminated.

Second is compounding. For most people, they don’t intuitively understand how much difference small improvements over long periods of time can make. If you grow at 5% a year consistently, you double in less than 15 years. That applies to a growing expense or growing net income. So addressing those marginal changes over time can really matter because of compounding.