4.10.2011

Health Care

This is the the best one paragraph summary of why the heath care market is different than markets for other products. From The Brave and Serious Mr. Ryan - James Fallows - Politics - The Atlantic
* On health costs and Medicare. For decades any "serious" approach to medical spending has had to cope with various tangled economic/technological/moral realities. This is a different kind of "market" from almost any other, as David Goldhill so vividly described in our magazine. You can shop around for houses or used cars, but you don't have the same kind of comparison-shopping opportunities when you go to the emergency room or when a doctor recommends one drug versus another. Technology has the opposite effect on medical costs from many other parts of the economy: more and more miracles become available, but at higher and higher cost. And the "insurance" aspect of our current system is skewed in many ways: You can pay fire insurance year after year and never have a fire, whereas all of us are going to die, and the great majority of us will require expensive treatment at some point before we do. "Insurance" therefore is a matter both of spreading risks across a general population, as with fire insurance; but also of spreading risks across the stages of each person's life cycle, from the lower-cost early years to the higher-cost later ones. This creates markets forces and distortions unique to the health-care world.

  • Consumers can't really comparison shop.
  • Technology makes medical care better but more expensive.
  • Health insurance isn't just about spreading cost across a group but from early life to late life.

Everyone that would like to see a government driven national health plan should memorize these, learn the arguments that go with them, and use them in our debates with the the tea-bagger and "I know someone in Canada that had to wait..." types who drink the free-market Kool-aid.

tnb

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