With Lenders and Insurance Companies Involved, Prices Might Go Up

   Should someone give thought to third-party economics? The traditional market situation involves a buyer and a seller, but with what I shall call third-party economics, a third party is involved in the transaction.
   And, as far as keeping prices down, this sometimes means trouble.
   The two forms of third party participation that come to mind as I write this are insurance and loans. When it comes time pay the bill, insurance and the loaner each become the paying party. In the case of insurance, the customer has paid the third party in advance, while in the case of loans, the customer pays after the fact.
   In both cases, there becomes a bigger pocket than the pocket of the customer. Insurance companies have bigger pockets than the customer, generally, and the same is true of lenders. They have bigger pockets than those of their customers.
   In yesterday's blog, I said one principle of economics is that if money is placed on the table, someone will sweep it off. In other words, if there is money made available, someone will gladly take it.
   So, if there is a bigger pocket to reach into, there is a greater chance the price of the product will increase. I do say that this is the only reason medical costs are so high, but I do wonder if it is one. And, likewise, I do not say it is the only reason college tuition is so high, but I do wonder if it is one.
   With third-party economics, prices sometimes -- not always -- go up.