In today’s Wall Street Journal, Hoover’s Peter Robinson reports on an interview with Gary Becker. Becker is not only one of the world’s finest economist, but also one of nicest people I’ve ever gotten to know. His warmth and benevolence come across in the interview, as they have in every conversation I’ve ever had with him.
Two good paragraphs about health care:
Drafting a good bill would have been easy, he continues. Health savings accounts could have been expanded. Consumers could have been permitted to purchase insurance across state lines, which would have increased competition among insurers. The tax deductibility of health-care spending could have been extended from employers to individuals, giving the same tax treatment to all consumers. And incentives could have been put in place to prompt consumers to pay a larger portion of their health-care costs out of their own pockets.
“Here in the United States,” Mr. Becker says, “we spend about 17% of our GDP on health care, but out-of-pocket expenses make up only about 12% of total health-care spending. In Switzerland, where they spend only 11% of GDP on health care, their out-of-pocket expenses equal about 31% of total spending. The difference between 12% and 31% is huge. Once people begin spending substantial sums from their own pockets, they become willing to shop around. Ordinary market incentives begin to operate. A good bill would have encouraged that.”
And the last two lines:
“When I think of my children and grandchildren,” he says, “yes, they’ll have to fight. Liberty can’t be had on the cheap. But it’s not a hopeless fight. It’s not a hopeless fight by any means. I remain basically an optimist.”
READER COMMENTS
John V
Mar 27 2010 at 4:11pm
Very practical ideas.
However, seen from a public choice/government realist POV, what powerful interest group would have helped that happen?
I can’t think of one.
“The People” won’t like it because it’s more work and presents the idea of “no free lunch” squarely in their face. Plus, it’s lacks the sexy, satisfying effect of a grandiose government program.
Insurance companies definitely wouldn’t like it. No need to explain there.
Health Care providers wouldn’t like it either because it forces them to be more aware of prices on the consumer side and not just the back-end costs.
Sounds DOA if you ask me. There’s no rent seeking anywhere to form a catalyst for some feel-good “for the people” angle.
Jonathan G
Mar 27 2010 at 8:04pm
Thanks for posting this, it really cheered me up after the downer of the health care vote.
What strikes me is how simple and logical his proposals for reform are. I don’t think that we as libertarians did a good enough job of calmly and eloquently explaining these ideas to people. I think that really speaks to Becker’s point. It’s not easy to convince people, but the strength and logic of freedom is so compelling that there is always reason to be optimistic.
jc
Mar 27 2010 at 10:30pm
Jonathan G writes: I don’t think that we as libertarians did a good enough job of calmly and eloquently explaining these ideas to people.
Makes me miss Harry Browne. He was very good at that.
Gary Rogers
Mar 28 2010 at 7:13am
I too enjoyed the article. The only thing I would suggest is that if the deduction for healthcare were eliminated instead of expanded, it would also remove the need for healthcare savings accounts and make things so much simpler. Of course our government, who always likes to keep things revenue nutral, would offset the elimination of the tax deduction with a tax cut to promote job creation.
Douglass Holmes
Mar 28 2010 at 7:25pm
I also loved that interview. But, I am reluctant to look at the Becker-Posner blog. I might not have enough time left over for Econlog. These things are addictive.
Comments are closed.