Arnold Kling  

Brad DeLong on Health Care

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He writes,


Our irresistible force is our belief that health care should not be rationed by price. Our immovable object is the unwillingness of American taxpayers to be turned into an IV drip bag for the health sector that the health sector itself controls. What happens when these meet is a crisis, which cannot be averted no matter whether we adopt the right-wing prescription, adopt the left-wing prescription, or muddle through.

I think he makes too much of personal behavior. Do we know that a really big percentage of health care expenses could be averted with lifestyle changes?


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COMMENTS (11 to date)
Randy writes:

Again, I don't think there has to be just one solution. Those who want a national plan should just get together and build it. Make it voluntary. 50 to 100 million volunteers should be able to build one hell of a good non-profit HMO without forcing those of us who prefer other options to participate. And who knows, if they build it good enough, it might very well become a universal plan in time.

Cyrus writes:

Brad seems to tacitly call for a Pigovian tax against triglycerides and oligosaccharides.

Boonton writes:

Interesting that the right seems to be very much in favor of 'consumer driven' plans which are really just high deductable plans often with some type of tax favored savings account added on to cover medical expenses.

If, however, most medical costs can be avoided by lifestyle changes then wouldn't the HMO model be superior? There the HMO could adjust incentives in favor of positive lifestyle changes (low co-pays for regular check ups and screenings, reduced gym memberships, cheap nutritional counseling) to reap the financial rewards of less heart attacks, diabetes, high blood pressure etc.

Cyrus writes:

Boonton:

Insofar as lifestyle management can reduce the HMO's costs, the HMO has an incentive to encourage healthy lifestyles.

But because a person's tenure with an HMO is typically shorter than the decades it takes for the unhealthy lifestyle choices of young adulthood to turn into the chronic illnesses of late middle age, the HMOs incentive to help their present clients remain healthy in the distant future is limited. In and of itself, this is an argument for single-payer.

Boonton writes:

It is if you can show that the single payer has a financial incentive to minimize costs so it can maximize profits. By definition, though, single payer would be insulated from competition!

It seems to me an HMO would view prevention as a sort of option. The cost saved in the future would have to be first discounted and then adjusted again to consider the risk that the patient may not stay with the insurance company anyway.

If the 30 year old smoker is going to leave the HMO then there's no risk. He will be someone else's problem when he is 65 with lung cancer. However he might not leave so then the HMO will save tomorrow by investing in getting him to stop today (or perhaps by charging him a slightly higher premium as life insurance companies do).

In the big scheme of things a few patches and a 800 line is a pretty small investment but beyond that it probably wouldn't pay much for an HMO to invest in prevention that needs more than a few years to materialize. It would for the government, however. If it could get 100 45 year olds to be a bit healthier today that could mean maybe 25 fewer operations it would have to pay for 20 years from now when they are on Medicare.

Public health appears to be a legitimate use of taxpayer money.

Randy writes:

I've always wondered if getting people to quit smoking creates less or more of a burden on the social systems. A smoker is likely to die rather young, whereas a non-smoker is likely to live quite some time as an old person, collecting Social Security and receiving care for a wide variety of old person ailments. Perhaps we need to encourage young people to avoid smoking, but issue motorcycles to everyone at age 65.

Matt writes:

Causes of death?

Various forms of compulsive behavior, followed by driving, followed by natural causes.

A fairly big decrease in national health costs can be averted if we knew how to control compulsive behavior, including addictions and bad relationships.

Of course, much of society is built on compulsive behavior, so good luck.

Wild Pegasus writes:

I doubt it helps much. A sizeable plurality of the health care expenses pile up in the last year of life. Whether or not that last year of life is 95 or 65, it's going to be expensive.

- Josh

Robert writes:

As I posted on Brad's blog:

I am a self employed person: 52, overweight, high blood pressure for 20 years (high BP goes back to when I was fresh out of the Army and, immodestly, was a stud). Had to find new individual insurance bacause my old guarantee issue group policy was adversely selected into oblivion. Could not and I am now in a state sponsored high risk pool. Not bad in Nebraska, but not good and ties me down almost as much as if I were a W-2. My immediate pain could be alleviated if I could buy into the state or federal government insurance plans.

spencer writes:

Since the causes of death have to sum to 100% if you sharply reduce one type of death by changing your lifestyle some other cause of death will have to rise, as everyone eventually dies.

Since we have no idea what other causes of death will increase, we can have no idea what changing lifestyles will do to health care cost. A change in lifestyle could just as well lead to an increase in health care cost as a decrease.

Travis writes:

I believe one of two things would happen with a national healthcare plan. The first being an inadequate healthcare system where people in need of an operation would be added to the long list of those in need of healthcare and this would skyrocket the price of any private healthcare because people would only use it if they had enough money to afford it or if they were in a position where they could no longer wait for medical attention. Or, the government would work towards a healthier America and invest money into medical research, smoking awareness and counseling, healthier foods, excersize facilities, etc. I think it'd be interesting to see if the government would work toward a healthier nation or not, it'd be in there best interest if the US did have a healthcare plan.

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