A local business publication recently reported some happy financial news for GlassHospital.

However, if read carefully, the article contains this apparent paradox:

  1. ER traffic is down.
  2. Hospital admissions are down.
  3. Revenue (and profit!) is up!

How can this be?

I mean, if this were a real business, wouldn’t less traffic and fewer ‘units sold’ equal less revenue and lower profits?

Not in Health Care Wonderland.

Welcome to HealthEcon 101.  Since I’m no economist (though I live near a famous Chicago School), I’ll do my best to keep it simple:

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