Giving Health Care Away
A new study reported this morning in The New York Times further undermines the moral hazard myth in health care. Republicans drone on that patients should see themselves as “consumers.” According to this theory, to reign in health care costs, the system should make them visible so that patients won’t consume more than is optimal. This is the (ostensible) central thrust behind Health Savings Accounts (accounts, which accompany high-deductible plans, in which “consumers” can put pre-tax dollars for medical expenses and keep any remainder). It turns out, when these costs are made visible, people do seek less treatment, but they don’t seek treatment more intelligently. When charged a co-payment for mammograms, women sought them 8% less, even when controlling for income and education, and hence got cancer more often (not only personally tragic but astronomically more expensive). Giving health care away is not just the right thing; it also costs less.
This study also undermines HSAs from a moral standpoint. How can more women getting cancer due to less treatment be morally justified?
The outrage of it all can be summed up in the simple question: "Have you no decency, sir?"
Satellite Sky Blog
Find the Truth. Do Justice.
January 29, 2008 8:45 PM | Reply | Permalink
Considering how irrational consumers can be in other areas, there's certainly no reason to expect rationality in a business where people develop attachments to their doctors and where they are scared that not consuming or consuming too slowly could make things worse. Doctors are no more likely to see themselves as mere "producers" than patients are to see themselves as "consumers." As you point out, the key here is to get people to consume indiscriminately those types of services that are highly preventive--for example, physicals, mammograms, blood tests, X-rays, MRIs, genetic screenings, or colonoscopies. Then they will be better able to be more discriminating about how to "consume" more costly and disruptive services down the road. When it comes to serious intervention, the most expensive or the first-proposed treatment is not always the best and giving them away for free or near-free can be a perverse incentive not to pursue preventive care or more effective (and maybe cheaper) options. Seeking a second opinion--which is really just "shopping around"--is always a good idea...if you have the time, of course.
January 30, 2008 10:22 AM | Reply | Permalink
I certainly do feel terrible for people who have run into problems with our current healthcare system and agree that there is a lot wrong with it. However, socialized medicine has its problems too. If we go to that system we could be worse off. I don't know that for sure, but I think it is worth a lot more study before we do something that could make it worse. In the style of the documentary SICKO, here is a documentary that provides case examples of how the Canadian system doesn't work well either - http://www.freemarketcure.com/
Jim Anderson
www.thetruthaboutcredit.com
February 28, 2008 10:06 PM | Reply | Permalink