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<< 13 Things That Do Not Make Sense | Home | A Clash of Cultures >>
It Ain't Free.
Here's a great post about health care payments. The real gem of the post is the article linked to in the post.
posted on Monday, March 21, 2005 1:00 PM Print
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# re: It Ain't Free.
Ben
3/21/2005 2:09 PM
I will try to answer “It Ain't Free. It Ain't Fair. It Ain't Healthy.» in an economically principled manner. The analogy presented in “If You're Paying, I'll Have Top Sirloin” is simplistic and doesn’t hold for health care. It doesn’t hold for several reasons.

First, health care isn’t a product you consume out of pleasure or luxury. I have yet to hear someone say: “I have nothing to do this Friday night and I just got a bonus, I might as well treat myself and go spend it at the hospital.” Even if it is free here in Canada, people avoid Doctors. I know very few people who like to spend time in the hospital. Only those who truly need it tend to go.

Second, because it is free, health care is rationed. The funding is limited so that only sick people get to use it. But instead of being limited by only monetary market forces where it is wealth that decides who gets treated it is personal need as evaluated by doctors that decides who gets treated. This makes sense because people do not get sick by choice. Doctors are well aware of the limited resources. The doctors know that if they send too many people to specialists or costly treatments the waiting time will grow. They do have an incentive to send only the patients who really need it.

To make the restaurant analogy closer to reality one would have to add the fact that there is only a limited amount of desserts at the restaurant, and the waiter had special training to help determine who needs it most. He would then give desserts only to underweight people who would otherwise suffer from malnutrition if they didn’t get it.

I agree that this method does have some flaws. For example it might be hard to decide how much resources should be given to health care (or how much desserts should be kept at the restaurant) so that treatments have high standards while still keeping incentives not to waste. If you give too much to health care there will be waste, and if you give not enough, doctors simply won’t have enough resources to treat everyone who needs treatments. Of course there are cases were care standards drop but once this is pointed out funding is usually increased. The fluctuation can’t be too great because, hospitals and doctors are subject to a certain standards and clients will bring them to court if they are neglected.

There is fluctuation in the quality of services because of what I would call the “human needs market forces”, but is this fluctuation really that much worst than the “monetary market forces fluctuations” that drives millions to be without insurance in the US? Is it really positive that in the US, the rich hypochondriac individual gets to use the doctors all they want while the poor person that truly needs treatment is neglected?

It is true that for a lot of products monetary market forces seem to make the system better as a whole because individuals often do know better what’s is good for them, but I believe we do have to give some credits to doctors and their ability to evaluate patients.

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