Arnold Kling  

On the Health Care Front

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Reihan Salam writes,


Mind you, we want poor people to be less cost-conscious when it comes to consuming healthcare, so in one obvious sense this is a strength of the French alternative. But then there's everyone else.

The post is a nice, well-annotated summary of health-care reform issues. One of the links is to an article in Business Week on the French system. It says,

every mother and child in the country receives basic preventive care. Children are evaluated by a team of private-practice pediatricians, nurses, midwives, psychologists, and social workers. When parents fail to bring their children in for regular checkups, social workers are dispatched to the family home. Mothers even receive a financial incentive for attending their pre- and post-natal visits.

If you're going to be paternalistic, then this is the way to do it most cost-effectively. The younger a person is when you intervene, the more lifetime benefit the person gets from the intervention.

Another interesting link is to a forthcoming book called Overtreated. It seeks to blame the evil capitalist system for overtreatment, and it carries endorsements from people with that anti-market temperament, but the book description says "our health care system delivers huge amounts of unnecessary care that is not only wasteful but can actually imperil the health of patients," which is somewhere in between what I've been saying and Robin Hanson has been saying.

In general, I think that real health care reform means getting rid of employer-provided health insurance, and coming up with a scheme that leads people to make different choices about medical procedures that have high costs and low benefits. That scheme could be a government-run HMO, but I don't think that the Left has the guts to try it. Or it could mean something like what I propose or what Brad DeLong proposes, which would give consumers a lot more skin in the game than they have now.

I do not think that the big fight is over "universal coverage," which is why I am not thrilled to see my name on this list of the anti-universal coverage club. I would not say no to Michael Cannon, my friend and the club's founder. But my attitude about universal coverage is, in New York dialect, "G'Ahead. Take a shot. I dare ya."

I've said repeatedly that the Left's reformers and its politicos are completely at odds on the universal coverage issue. The reformers want to get rid of health insurance companies, and the politicos don't want to rock the employer-provided health insurance boat. The Left is boxed in on this issue, and they need a scapegoat. The way I look at it, Michael is just walking up to them and saying, "Ma-a-a-a-a-ah."


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William Newman writes:

You write "In general, I think that real health care reform means getting rid of employer-provided health insurance, and coming up with a scheme that leads people to make different choices about medical procedures that have high costs and low benefits."

I really don't understand how economists can write about the policy issues around health care and health insurance and ignore barriers to entry and limits on freedom of contract. Arguing against removal of barriers to entry, I could understand that. But writing as though the wisdom of high barriers to entry goes without saying? (Or as though the barriers are negligible?)

Consider Milton Friedman. Twice, in fact. First, consider that if MF thought that the barriers to entry in medicine are a big bad idea, then it seems pretty unlikely that the barriers to entry are so obviously a good idea that it goes without saying. (I do realize that argument from authority can be very stupid, but I think "if it wasn't obvious to authority X, then it deserves an explanation why you think it should be obvious to me" is less stupid than "authority X believed it, therefore it is true.") Second, of course there is a danger of being thought a crank, but consider that MF is a good example that calling things as they are is not necessarily a thankless job (at least in the long run).

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