TomB writes:
People are priced out of the market because most health insurance plans are very expansive - they cover a lot of conditions. This is in part because of state regulations. It is in part because of federal tax advantages given to employers. It is in part because everyone wants the best care when they or their loved ones are afflicted by a condition, suffering, or dying.
I think that all people should be able to have some kind of catastrophic insurance. They should also have access to basic health care. But everyone simply cannot have access to all the health care that is out there. Health care must be rationed somehow. Nothing indicates that the government is somehow better positioned to decide which treatments people should be able to have.
Not everyone can have access to every lifesaving treatment. Example. Let's say someone discovers a way to cure cancer, but the process requires the application of radiation therapy in a zero-gravity environment. So to take advantage of the cure, you have to go into space. Should health care cover the cost of the space flight? Is it unfair that low income people cannot afford this cure while high income people may be able to?
I know the example is a little extreme, but "quality" health care has come to mean the "best available" health care. Unfortunately new treatments frequently are not cheap. Nor are labor intensive treatments. Over time, technology based expenses go down, as patents expire and as technology improves. Labor intensive treatments might not decrease in price as much. But still, everyone cannot have them.
People should have access to cheaper treatment. Unfortunately, everyone cannot have expensive treatment, even if it is lifesaving. And price is still the best way to ration the scarce good.
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Tim Fowler writes:
Chuck - Re: "If rationing by price (not income) is the best way to control costs for health care, why do US consumers spend roughly twice as much per capita for health care and have essentially the same outcomes as the rest of the world?"
One reason Americans pay more is that for Americans health care is often NOT rationed by price. We are insulated from the actual price. Most Americans have insurance. And uninsured people in the US who don't have insurance sometimes receive health care without paying the full price, or even paying anything.
Also the "rationing method" isn't the only factor in health care costs. The medical culture in the US supports more effort and cost for extreme lifesaving attempts, or expensive treatments to slightly prolong life. The legal culture in the US supports more lawsuits when there is a poor result from medical treatment, which in turn is a major (probably the biggest but probably not the only) reason that our medical culture supports more use of defensive medicine. Then there is the fact that the US is wealthier than most countries. As countries gain in wealth the tendency is for them to spend more, often even as a percentage of their income, on medical care. Then there is the fact that there is more explicit rationing of health care in other countries with care just denied in some cases and long waiting lists in others. "The best way to contain costs" is not meant to imply "the way that keeps costs the lowest. If that's what it meant the best way to contain medical care costs would be to outlaw medical care.
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