Cato is carrying a commentary on its libertarian thoughts on the issue of expanding health coverage to those without insurance. The punchline:
They could start with the fact that federal laws have created a health care system where patients are too often spending someone else’s money when they purchase medical care. On average, third-parties pay for 86 cents out of every dollar of medical care American patients receive. That’s about the same share as under Canada’s socialized health care system.
As a result, U.S. patients demand too much medical care and pay too little attention to whether that care is cost-effective. Is it any wonder health insurance premiums are skyrocketing, our uninsured rate is too high, and quality is less than it should be?
There’s a lesson here for those who want to cover the uninsured: focus on the incentives facing the 250 million Americans who have health insurance, not on the estimated 47 million who don’t. If the federal government stopped encouraging people with health insurance to be less careful consumers, then coverage would be more affordable, the number of people without coverage would shrink, and the quality of care would improve.
I think that almost nails it. However, I do have two caveats to my agreement.
First, the author points to the efficacy of techniques used in employer-subsidized health insurance programs to control costs as a sign that such measures should be pursued as an avenue to address the expense of health care. While it’s true that shifts such as the rise of the HMO did bring costs in check for a while, I am under the impression that those savings were more a result of the structural shift, and haven’t done much to reign in the underlying pressure from medical cost inflation. With the structural savings achieved, costs begin to rise disturbingly quickly again because of that pressure.
Second, there is a challenge in the implied notion of some sort of systematic pressure to achieve some additional level of efficiency and cost-effectiveness of treatment. I agree with the notion in principle.but I am leery of many institutions’ and the government’s ability to engage in such a strategy. One only needs to look to the pork coming out of Washington DC, or all the folks who have the “joy” of waiting hours in an emergency room waiting room for treatment for which it should be quick-and-easy to get them stabilized and scheduled for care in a less-urgent environment, but aren’t due to cumbersome procedures put in place to protect the doctors and hospital from legal liability.