Monday, March 1, 2010

Common Sense on Bringing Down Health Care Costs

CATO dude Michael Tanner points out that the best way to bring down health care costs is to use less health care. He's right that the Republicans are not broadcasting this economic fact, probably out of fear of it's unpopularity. But it needs to be stated, so we have to let the libertarians say it. Excerpt:

No one is suggesting that people shouldn't have insurance. But insurance is ultimately meant to spread the risk of catastrophic events, not to simply prepay your health care. Your homeowners insurance covers you if your house burns down. It doesn't pay to mow your lawn or paint the fence.

I suppose I feel justified by this since I'm one of those catastrophic policy holders that the President doesn't considered to be really insured. Well, I don't smoke like he does, so I'll probably have less health problems. Besides, it's my life. And it's my money.


  1. IMO, one reason we spend so much on health care is because we want to, and we can afford it. Why the hell else do I work except to be able to take care of myself and my loved ones in times of need, such as when they need to see the doctor?

    Demand is high because we want the services.

    How much would have someone in the '30s (like FDR himself) paid for blood pressure medicine, for example? They would have paid a lot -- but they paid nothing then because the medicine was not available (i.e., not invented yet).

    Aggregate national spending on health care is about the stupidest measure known. Yeah, Zimbabwe spends less -- because they get very little.

  2. Pik, another thing which can't be dismissed is that a lot people with company healthcare never see the bill. People in the healthcare industry *love* this kind of coverage. You walk in to get an MRI and you don't care what it's going to cost because paying for it is *untethered* from the service. Yeah, you are ultimately paying for it in the form of lower wages because the insurance company is soaking your employer, but there is no immediate effect felt.

    Companies love to bill other companies, and the bigger the company your billing, the better. I basically muscled my down my insurance provider for a better rate. He lowered our rate to shut me up. Most people aren't assholes like me, so they don't want to "rock the boat".

    What we need is more tethering of services and costs, then we need patients to go in and say, "You want $150? I'll give you $40, how's that?"

  3. Agreed, Pauli. The marketplace fails when the one receiving the goods or services is not the one paying for it. In this case, the employer-insured patient is not the customer. The employer is the customer.

    I, too, have individual (i.e., not group) health insurance these days. Guess what -- it is $1k/month cheaper than our group plan would have been this year. I get the plan I want, and the insurers compete for my biz.

    My health care reform would separate health insurance from employment, just like car insurance is. Then we'd see competition for our business, and as many health insurance ads on TV as we do ads for car insurance, which are plenty (Pres. Palmer for Allstate, Geico gecko, Flo for Progressive, to name a few).

    As far as those with health problems are concerned, the Great State of Texas has a Risk Pool set up. I am familiar with this thru a family member. Coverage is available under it for those denied their own insurance (and who are not in an employer group, etc.). The insurers in the state divvy up coverage for these people. Premiums are higher than for healthy people, but are capped by the state, who provides a subsidy to the insurers for covering these people. A pretty good plan, I'd say, and it doesn't bust the budget.