Monday, September 19, 2011

Hole in the head and the heart


Please excuse me from departing from the mainstream of the discussion on this blog about the current U.S. economic position.  There was recently a very interesting exchange in the Republican debate where Wolf Blitzer asked Ron Paul a question about a hypothetical situation.  Paul Krugman has commented on this exchange.

Wolf Blitzer: "A healthy thirty-year-old young man has a good job, makes a good living, but decides 'You know what, I'm not gonna spend two hundred to three hundred dollars a month for health insurance because I'm healthy, I don't need it.' But, you know, something terrible happens, all of a sudden, he needs it. Who's going to pay for if he goes into a coma, for example? Who pays for that?"

Ron Paul: "In a society where you accept Welfarism and Socialism, he expects the government to take care of him."

Wolf Blitzer: "What do you want?"

Ron Paul: "What he should do is whatever he wants to do and have some responsibility for himself. My advice to him is to have a major medical policy, but not be forced..."

Wolf Blitzer: "But he doesn't have that. And he needs intensive care for six months. Who pays?"

Ron Paul: "That's what freedom is all about. Taking your own risks. This whole idea that you have to prepare and take care of everybody..."

Wolf Blitzer: "But Congressman, are you saying that society should just let him die?"


Ron Paul: "No, ..."


Audience: "Yes."


If you take notice, this question is posed on grounds that should be very comfortable for any conservative.  The man is in immediate need after making a serious mistake in his life, namely not buying health insurance when he could afford it.  Framed that way, it is very easy to say, "He made a bad choice.  He didn't buy insurance when he could afford it and he bore the risk of that decision."  Not all of us need agree with that position, but it can be made with no serious logical problem.

There is an economic justification for universal health care, but, for the moment, the philosophical approach is more satisfying.  Do we really want a society where the treatment of health problems depends upon the ability and willingness to pay for insurance and/or the pharmaceutical and procedures which are needed?  Should anyone die of a treatable illness?  I am philosophically opposed to deciding treatment by ability to pay.

Often the opponents of a universal health care system state that it will lead to the rationing of care.  That is ridiculous, not because it won't happen, but because the market system is just another system of rationed care.  Instead of rationing by specific policy, perhaps saying that certain procedures are not covered or that other procedures are higher priority, the market system rations by the ability and willingness to pay.  The market system is generally preferred for most goods and services because the supply and demand tends to meet at a position that is efficient for producers and consumers, where there is perfect information and perfect competition.  There is a serious problem with health care, however, because people have need of it regardless of their ability and/or willingness to pay for it (which may be true in other markets, but it is particularly acute and the life/death choice is apparent).  The outcomes in this market have serious implications.

Some have argued that health care is a public good.  To some extent, this is clearly right.  For example, treatment of the infectious disease of one person is likely to have large spillover effects onto others who would otherwise be exposed to the disease.  There are other elements of health care that pose serious issues of market failure.  For example, in insurance markets, people pay for their actuarial risk rather than the risks that they choose to expose themselves to unnecessarily.  In this way, people have to pay for things over which they have no control, like the fact that they are an alive human being of a certain age and a certain sex.  They also have to pay different rates depending upon their risk pool.  The cost of insurance depends on how you pay for it, which makes little, if any sense, to an economist.  A matter which is going to change in the near future is that people could be excluded from insurance based on pre-existing medical conditions.

Many economists and a few politicians have indicated that the U.S. health care system is too expensive for its outcomes.  This is true.  Just about all other advanced industrial nations have a system which achieves true universal coverage at considerably less than the United States.  Another matter which bears mentioning is that much of the long-term fiscal imbalance is driven by projected health care inflation.  As Paul Krugman has pointed out, however, health care costs have risen more slowly within the Medicare than private insurance.  Robert Reich recently said that the solution to the health care problem is Medicare for all.  A universal single-payer system could certainly use the power of its purse to control medical costs, including cost-effectiveness standards, and impose efficient systems of information-sharing among providers.


There is likely much that could be done to make the health care system more universal and more efficient, but while there is still debate on whether "...society should just let [them] die," the important discussions are ultimately ignored.

1 comment:

  1. I still don't know what to say about it - it was so horrifying.

    ReplyDelete