photo by EfrankE

Tuesday, March 30, 2010

Parkinson’s Law

In mid-century last, a man named Cyril Parkinson wrote an essay, the thesis of which was that “Work expands so as to fill the time available for its completion.” It was written as a humorous reflection on an observable phenomenon: People tend to take as much, or as little, time to complete a task as the time available to perform it.

This adage was later quantified as a mathematical equation to explain the rate of bureaucratic expansion over time. This expansion is characterized as two-fold: 1.) “An official wants to multiply subordinates, not rivals” and 2.) “Officials make work for each other.” The result is that the number of employees working in a bureaucracy increased at a yearly rate of 5-7% “irrespective of any variation in the amount of work (if any) to be done.” This expansion is observed in “required” federal budget annual increases.

A corollary to Parkinson’s Law is, “The demand upon a resource tends to expand to match the supply of the resource.”

If this corollary is correct, the more available health care services become, the more health care services will be utilized. If the rate of utilization keeps increasing, say at a 5-7% rate per year, the budget required to provide the services will also increase at that rate. It’s not hard to see how the cost of funding the health care bill could double in 10 to 12 years.

While it’s not hard to see the call for tax increases to pay for the increased future cost of health care, it’s somewhat more difficult to see incomes increasing at the same rate.

Where do you suppose the money to pay for the bill will come from?

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