Arnold Kling  

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James Pethokoukis thinks that Rudy Guiliani has fallen under my spell.


what Giuliani is doing is far more radical than his folksy debate answer suggests. Essentially, he is calling for the complete abolition of the current way healthcare insurance operates in the United States. It echoes the analysis of libertarian economist Arnold Kling, who argues that what Americans have right now is health insulation, not health insurance.

Also, Crisis of Abundance gets included in James C. Capretta's discussion of some recent books on health care for The New Atlantis.

UPDATE: He doesn't mention my name, but David Leonhardt gets my thesis.


The main reason so many people lack health insurance is because of its cost. And a big reason for that cost is the explosion of expensive, medically questionable care, be it knee replacement, preventive angioplasty or lumbar fusion. The route to an affordable health insurance solution runs straight through this thicket.

Along these lines, the three leading Democratic candidates have quietly come up with nearly identical ideas. Deep inside their health care plans, Mrs. Clinton, Mr. Edwards and Mr. Obama have each called for the creation of a national institute to figure out which kinds of medical care actually work. This institute would sort through the scientific research on, say, spinal fusion and help people understand when it may make sense and when it’s likely to be just another big medical expense that doesn’t solve anything.


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COMMENTS (4 to date)
Horatio writes:

Unless he plans to do away with Medicare, we'll still have a system terribly crippled by interventionism.

Floccina writes:

When I think about the living will form that my doctor is giving out to all his patients, it makes me wonder is people are not already moving to solve this problem without government help. They are at least addressing cost that they see as worthless at the end of life. It would of course be better if people could get insurance that excludes certain high cost low return treatments throughout life, along with high deductibles. My guess is that the most effective medicine is not all that expensive (antibiotics and vaccinations come to mind). The middle area is what we need insurance for treatable cancer and heart disease can be expensive but these days treatment can deliver years of good life but currently we treat people even the likelihood of recovery is very small with not regard to the expense. I often wonder if the insurance companies offered a buyout feature for example saying you can get this full treatment or a lesser treatment and this amount of money equal to half the expense of the treatment what it would show about people’s values. (Some might take the money go to Apollo healthcare in India). Anyway I think that the results would be very interesting and might show how much value we are getting for our money.

Floccina writes:

I edited my above error full post.

When I think about the “living will” form that my doctor is giving out to all his patients, it makes me wonder is people are not already moving to solve the cost problem, without government help. They are at least addressing end of life cost that they see as absolutely worthless. It would of course be better if people could buy insurance that excludes certain high cost low return treatments. My guess is that the most effective medicine is not all that expensive (antibiotics and vaccinations come to mind). The higher cost areas that often help are what we need insurance for. For example treatable cancer and heart disease can be expensive but these days treatment often delivers years of good life. A problem that I see is that currently people are often treated with expensive care even if the likelihood of recovery is very, very small.

I think that an interesting experiment would be to have some economists get with some insurance companies and offer patients a buyout in place of treatment. For example you could offer the patients the option of full treatment or a lesser treatment and various amounts of cash paid to the patient for his forgoing the cost of treatment. This would reveal people’s values. Some people might take the money and go to Apollo healthcare in India others might choose to die in dignity and leave a bigger inheritance. Anyway I think that the results would be very interesting and might show how much value we are getting for our money.

Tom Barry writes:

The British National Institute for Clinical Excellence does the kind of thing you're proposing.

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