In an article entitled “Rationing and Rationality”, the editorial staff of the National Review Online makes (what I think is) a profound observation concerning the nature of health care rationing:
“The view that medical care should be withheld from people based not merely on the likelihood of success or the cost but on judgments about the quality of their lives is no longer held only by a fringe. Practices that are at best close cousins to euthanasia have become widespread.”
Here are links to two articles on health care reform that I read earlier today. I particular like John Cochrane’s ideas about market-based mechanisms for addressing pre-existing conditions. Earlier this week, a WSJ editorial entitled “The Truth About Health Insurance” noted, among other things, that “University of Chicago economist John Cochrane also argues that in a more rational individual insurance market, people could insure not merely against medical expenses but also against changes in health status. This kind of insurance would cover the risk of premiums rising as you get older and your health condition changes.”
As Greg Mankiw notes, ” British healthcare is great…as long as you walk on four legs (see http://gregmankiw.blogspot.com/2009/08/british-healtcare-is-great.html). The author of the WSJ article, Theodore Dalrymple, concludes his article by noting,
“And what I want, at least for that part of my time that I spend in England, is to be a dog. I also want, wherever I am, the Americans to go on paying for the great majority of the world’s progress in medical research and technological innovation by the preposterous expense of their system: for it is a truth universally acknowledged that American clinical research has long reigned supreme, so overall, the American health-care system must have been doing something right. The rest of the world soon adopts the progress, without the pain of having had to pay for it.”
Health-Care Reform: Do Animals or People Get Better Care? – WSJ.com: Theodore Dalrymple on who gets the better treatment, and what this means for U.S. health-care reform.
Here’s a cautionary tale from a country that we seem to be trying to mimic in many other ways!
Will health care reform cause lower wages? @ KeithHennessey.com
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Today in my risk management course at Baylor University, I showcased an article entitled “Tough Questions Dog Health-Care Overhaul”. Specifically we determined that the correct answer to the question “Should individuals be required to buy insurance?” is yes. The context for this answer is that mandated coverage would need to be compulsory in order to force the level of inter-class subsidies (going from healthy people who overpay to sick people who underpay) that would be required in order to prevent substantial adverse selection in which only the sickest people buy coverage. There are tremendous efficiency losses from such a requirement, but I don’t see, given the theory of adverse selection, how a system such as Team Obama has proposed can possible be financially viable without such a requirement. I would add that there are any number of other ways one can expand coverage to people without having to bear such high adverse selection costs. For example, some type of expansion of the current version in which we continue to rely primarily upon private markets supplemented by separately capitalized state run risk pools would probably be far more effective in terms of expanding coverage as well as mitigating moral hazard and adverse selection.