Arnold Kling  

Hanson on Hanson

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What is this Hansonian view of medicine that you hear me talk about? Robin Hanson explains.


The bottom line is that thousands of people randomly given free medicine in the late 1970s consumed 30-40% more medical services, paid one more "restricted activity day" per year to deal with the medical system, but were not noticeably healthier! So unless the marginal value of medicine has changed in the last thirty years, if you would not pay for medicine out of your own pocket, then don't bother to go when others offer to pay; on average such medicine is as likely to hurt as to help.

Read the whole thing.


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COMMENTS (3 to date)
jp writes:

Hanson makes an excellent point. However, his test ("if you would not pay for it out of your own pocket . . .") is not really practical at present (assuming he meant it to be). Tax incentives and other government interference in the medical-services market have bid up the price of healthcare so much that the current out-of-pocket price for care is meaningless as a standard.

Chuck writes:

I don't think that's quite what they conclude.

Here's a paper written by two profs from U. of Chicago that summarizes the RAND study and many other studies as well.

A few quotes:

Observational studies of the effect of health insurance on health clearly suggest an association between the two, but provide little evidence on whether this relationship is causal. We focus on quasi-experimental and experimental studies whose results provide a basis for drawing causal inference. The results of small quasi-experimental studies provide only mixed evidence that health insurance affects health, while larger quasi-experimental studies and the RAND Health Insurance Experiment provide consistent evidence that health insurance improves health. Only one large-scale quasi-experimental study (Perry and Rosen) fails to show a relationship between health insurance and health, and this study may not have adequate power to rule out the possibility that health insurance improves health. Taken as a whole, these high-quality studies of the health effects of health insurance strongly suggest that policies to expand insurance can also promote health."
"Another lesson from this literature is that the size of the effect of health insurance on health depends very much on whose health we are talking about. Vulnerable populations such as infants and children on the fringes of Medicaid eligibility or low-income individuals in the RAND experiment have the most to gain from more resources, and do appear to benefit from them."
Chuck writes:

The link to the paper isn't very clear, so I thought I'd post it explicitly...

http://www.umich.edu/%7Eeriu/pdf/wp6.pdf

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