Health Care Made Simple

One of my favorite economists Arnold Kling talks about health care:

I was at a dinner a few weeks ago at which a man firmly asserted that health care should not be considered a commodity. It should be considered a "right." That sounded convincing, and many people at the dinner nodded their heads.

But many, perhaps most, of the medical services that we obtain nowadays are not so clearcut. In Michael Moore's Sicko, one of the cases was a man whose kidney cancer was past the point where conventional treatments would work, and doctors offered a bone marrow transplant, an expensive treatment with no track record of success. Should expensive, desperation therapies be a "right"? If so, then the already-high share of medical spending that takes place in the last year of life is going to rise further.

Does a patient have a "right" to an angioplasty, when the evidence suggests that treatment with drugs may be just as effective? Does someone who hurt his back have a "right" to an MRI that probably will not affect the treatment plan? Does someone aged 50 with no symptoms have a "right" to obtain a colonoscopy to screen for colon cancer, and, if so, why do so few people in the industrial world exercise this right?

The reality is that many medical services have low value. And with health care now accounting for more than 15 percent of our economy, the cost of these low-value services can no longer be ignored. . .

By drawing attention away from these more pressing problems, the "universal coverage" mantra has greatly distorted the health care debate. In response, my Cato friend Michael Cannon has formed a "club" of health policy analysts opposed to universal coverage. Although I agree with his sentiments, I think that the longer that the issue of the uninsured goes unaddressed, the more it will dominate the policy agenda. I would be willing to see one of the "universal coverage" proposals enacted, if doing so would enable us to move on and face up to the larger issues, such as Medicare's fiscal problems and the cost-effectiveness of medical protocols.

However, if I could pick any policy approach I wanted for dealing with the uninsured, I would try to move toward universal availability of health insurance, not universal coverage. I would encourage states to offer health insurance to the uninsurable. That is, there are people with pre-existing conditions that lead them to be turned down by ordinary health insurance companies. Many states address this problem by setting up "high-risk pools" that provide subsidized coverage for the uninsurable. That seems to me to be a sensible approach.

On the other hand, most of the people who are uninsured today are reasonably healthy. They just do not want to pay for their own health insurance. In my view, they ought to be allowed to make that choice, but they should face the consequences. If they require health care, the cost should not be shifted onto other people who have insurance.

I've said some of the same, but Kling says it better.