Cement Shortage, Oil Prices, and U.S. Healthcare

TODAY I AM GOING TO CONNECT CEMENT SHORTAGES and spiraling oil prices to intractable problems in our healthcare system. It’s a way for me to show you an example of how globalization’s impact to non-healthcare businesses can similarly affect the American healthcare system.

Climbing gasoline prices, now above $2.00 per gallon in many regions of the country, have been big news. That’s because oil is trading above $40 per barrel, an all-time record high. But what’s gotten less publicity is the shortage of cement in the United States. During 2003, the U.S. used 112.3 million metric tons of cement. Of that total, about 17%, or 19 million metric tons, is imported. Florida, a state which imports 40% of its cement, already has an acute shortage. Construction projects are delayed or shutdown because of the shortage. Spot shortages are occurring in other states, such as Texas, Louisiana, and South Carolina. Experts say the cement shortage is not due to inadequate supply, but because China—with its booming economy—has tied up the world’s shipping lines to transport other building materials!

I consider this an economic development worth noting. Since World War II, the United States has been the unquestioned economic engine of the world economy. It imported a high proportion of the world’s raw materials. That is no longer true. Oil prices are high because China is using significantly more oil each year. India’s economy is growing, as is its appetite for resources like oil, cement, lumber, and steel. (Prices for the last two which have climbed 60% and 50%, respectively, during the past year). Even the Japanese economy, moribund for almost 15 years, has begun to grow at strong rates.

High prices and relative shortages of materials such as cement, oil, lumber, and steel signal that the United States is no longer the absolute, dominant influence on the world’s economy. China and India are serving notice that they have the demand—and the money—to pay for the resources needed for their countries’ growth.

I predict the American healthcare system will soon feel competitive pressure from outside our borders. It will come as these countries become wealthier and compete for healthcare resources. Healthcare here may then be tugged into two directions. One is the international outsourcing of some clinical services. Two is the need to bid for equipment and consumables, leading to higher healthcare prices in the United States.


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