Affordable Health Care

You might want to read Scott Atlas’s thoughts on genuinely affordable health care at Defining Ideas. He proposes three different sets of changes:

  1. Incentivize and equip consumers to consider price.
  2. Strategically increase the supply of medical care to stimulate competition.
  3. Introduce the right incentives into the tax code.

While I think he’s on the right general track, I’m afraid that even if fully adopted those measures would prove inadequate. Basically, the evidence that people make prudent choices about health care, regardless of incentives is weak. They economize in ways that increase long term costs and fail to economize when it would make sense. They assume that increased care can make up for reckless behavior.

You can have fee for services or you can have physicians determining the course of treatment. The sad reality is that if you have both, there’s no practical way to control costs while preserving reasonable levels of public health.

Let’s define our terms. I think that health care should be deemed unaffordable in any system in which spending on health care rises faster than spending outside of health care. Who pays is less important than how much.

Most of the argument over the last decade has been over who pays. IMO that’s misdirection, sleight of hand.

3 comments… add one
  • Jimbino

    Incentivizing customers to consider price will be no good until we force all healthcare providers to publish all their prices, just like Walmart does.

  • TastyBits

    Every proposal to address individual health care spending is met with the retort that “only 1% of the users (or whatever percentage) account for 90% (again, whatever percentage) of the spending.

    Every proposal to address group health care spending by splitting the spending into a high risk and low risk pools is met with the assurance that high risk pools cannot work.

    The single payer solution is simply keeping the existing mess but having it financed by the government, but this will not work because it will not contain costs.

    Whereas there is a socialized public school system, a national health care system will not work . Socialism is dirty word except when non-socialist parents send their non-socialist children to a socialist school.

    As far as I can tell, the health care discussion/debate is about nothing more than the number of words a person can write.

    This is beyond Lewis Carroll’s nonsensical logic. It is Kafkaesque.

  • Whereas there is a socialized public school system

    In real terms we spend about three times as much on education as we did 25 years ago and whatever improvement there is in results is nominal. In other words we’re not doing much of a job in controlling costs there, either.

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