The latest issue of The Economists’ Voice is a special issue on health care reform. David Cutler explains the economics of health reform, while Mark Duggan and Robert Kocher weigh in on health-insurance exchanges. “Put simply health care reform will succeed or fail?based on two fundamental criteria: Do people?get the coverage that they were promised, and?that they want?” writes Cutler, who played a role in crafting the legislation. “And, do we change the delivery of medicine to promote high quality, lower?cost care?” [%comments]
Economists on Health Care
TAGS: David Cutler, health care
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Jimbino … So you’re not going to be old and sick some day and you’re not into all this sharing or being your brothers’ keeper stuff. Here’s what I don’t understand about your position, which seems to be widely shared: Those conscientous about providing for themselves on their own (i.e., without sharing risk or costs) have to plan and save to cover worst case scenarios. If your house burns down, you pay for replacing it. If you get cancer, you pay for the treatment. Of course if your house doesn’t burn down or you don’t get cancer, you’ve saved too much. You should have retired to that beach in Barbados. Isn’t it better to share those risks than to bear them on your own? Rather than save so much, why not contribute to a pool of resources (an insurance policy) to cover those who actually do lose their houses or get cancer. Maybe you get to Barbados afterall! Of course there’s the case in which you choose not to adequately save or insure and tragedy strikes. If your house burns, you live on the street. If you get cancer, you die soon. But wait. What if you change your mind? What if you want shelter … what if you want life? What if society as a whole has decided it’s going to provide you with shelter or a chance at life whether you save for it or not? I guess your claims at that point become just like those you fear from potential free riders right now … just another “externality” shifted onto the shoulders of the tax paying public.
Clearly there’s fear that these programs may not be run well for some reason. And there’s the moral hazard crowd that’s fears any incentive not reflected in the law of the jungle. But why are these risks more daunting? Why is “Socialism like Obamacare” any different than other insurance schemes that spread costs across all potential “victims” of old age and health catastrophies? I guess you can argue that in a democracy there’s a risk that we might elect someone who prefers a hands off approach, who administratively defangs the regulators and takes us back to the law of the jungle. But isn’t that unlikely?
Health care for the general public will mean revamping of the entire delivery system.This will take time because of the entrenched special interests. Doctors and insurance carriers will scream. Drug costs must be brought under control, labor costs must come down, insurance costs must be regulated, priorities for care must be sorted out. All of this will require rethinking the system.
The benefits must be extended to all, not just to special groups. The real advantages of a healthier population and a lower cost system are not clearly understood now, they will become clear as the system is implemented, but it will be a wrenching adjustment to get there.
However the US should not have a wealthy only health system, it needs to change. It is actually behind many third world systems in terms of delivery now, mostly because these systems have their labor costs under control.
the us health care system is not about providing care but about exploiting and taking advantage of the sick and those who are afraid of getting sick…
All other industrialized countries have some form of universal government run health care. They get better care as measured by all 16 of the bottom line public health statistics, and they do it at half the cost per person on average. If our system were as efficient, we would save about $1.3 TRILLION each year.
Do you think we might learn something from them>
@9–Way out here:
You are far kinder and more reasonable with Jimbino than I was going to be. I was going to suggest he sell his heart because he obviously never uses it. He’d get a good price for it too!
Bless you.
Way out there–
You pretend that there are only two choices: Free-riding or Obamacare. That is a totally false dichotomy.
Of course insurance spreads risk. It is also used by socialists to transfer money or, in Obama’s words, “spread the wealth around.”
The whole idea of insurance is stupid. Can you imagine that those folks who do an attempt on Everest worry about insurance? Do you imagine that they can even get insurance? And if they could, would you expect a skilled climber to willingly participate in an insurance racket that charged him the same as a 9-month pregnant woman and gave her a discount for the young daughter she wants to bring along? Of course not.
Enlightened self interest: The fact is humans are social animals. We depend upon each other; the rugged individual is a myth. We can not survive alone in fact the worst thing that can happen to a human is to be isolated from others.
The politics of divide and conquer have been used effectively for far too long and it is time to take care of each other. We have all the tools we could ever want right now to provide organization and cooperation.
First we must learn how to communicate the conditions and requirements of our social contracts in the most concise and clear manner possible and use legal advice to share risk rather than trying to avoid it.
If you think you can plan for every contingency and actually implement it by yourself you are delusional. The only future we have is the one where we work together. Why do you think FaceBook is valued at 50 billion?
I always keep a couple of core principles in mind. Insurance is like gambling. They are betting you will not get sick this year, your house will not burn down or get flooded this year, you will not be in a car accident this year and you will not die this year…and the odds are significantly in their favor. You, on the other hand, are betting that something will happen to you.
If you are on the cusp of winning, they can change rules or refuse to take the bet.
We’ve decided that our health care should be based on capitalistic principles: 1) Private companies get to “maximize profits” which means providing the least amount of service for the most amount of money. 2) If private companies can’t make a profit on the bet, turn them over to the government (which is us – the taxpaying public).