as Kevin wrote almost a year ago: 

But healthcare is something too important to be left to the market you say. Or healthcare doesn’t work like other goods because you have to have it inorder to live you say. Doesn’t food meet those same requirements? Yet we allocate food in this country via the free market, and the crisis du jour is obesity. If we stopped allocating healthcare in this country via the current odd employer standing in for government system, and instead allocated healthcare via a free market, the crisis du jour would be longevity. 

Michael Barone now observes that HSA accounts are bring market forces to health care:

How many times have you heard that health care costs are rising at record rates? Well, they aren’t any more. 
[…]
Something is going on out there. Politicians and political commentators always assume that government must do something new and different if health care costs are to be held down to bearable increases. But the evidence is that health care costs are being held down, by the workings of the marketplace, partly in response to health care legislation passed in the last four years. 
[…]
The other interesting development is the emergence of health insurance policies that encourage healthy behavior. Health care experts note that the increasing incidence of diabetes and other obesity-related diseases threatens to hugely increase health care costs in future years. 
[…]
The overriding assumption in much commentary on health care finance is that individuals and companies are helpless automata waiting for government action before anything can be done anything about health care costs. But recent developments suggest that, in fact, employers and employees are active players, and that provisions of recent legislation that were not much noticed by the commentariat have enabled them to take action that reduces costs and provides increased benefits and incentives for healthier behavior. 

We have problems, yes, but we are not helpless. 

I don’t know that we are at risk for a longevity crisis yet, but it’s a welcome developement that market incentives are finding their way into the health care equation.

Tags: healthcare

From the Great Minds think alike department:

“If you ask most people about the cost of medical care, they may tell you how much they have to pay per visit to their doctor’s office or the monthly bill for their prescription drugs. But these are not the costs of medical care. These are the prices paid. The difference between prices and costs is not just a fine distinction made by economists. Prices are what pay for costs — and if they do not pay enough to cover the costs, then centuries of history in countries around the world show that the supply is going to decline in quantity or quality, or both.”

——————Thomas Sowell 5/4/04

“I’ve noticed that a lot of Democrats and some Republicans have difficulty with the difference between price and cost. Cost is what it takes to make or provide something. Price is what you are charged for the thing or service. Politicians are constantly telling me how they are going to lower the cost of something — typically healthcare, ocasionally housing — when all they are going to do is lower the obvious price and do nothing for cost. Are they going to do anything about the government regulation and oversight that adds to the cost? Heck no. They’re going to have a single pay system dictate price. It’s enough to make you vote Libertarian.”

——————–Kevin Murphy 3/9/04

I’d like to claim “advantage blogosphere” but I can’t since Thomas Sowell has been pointing this difference out for a long time and he’s the guy who first clued me into the difference. 

The problem with healthcare is that we’ve got a half-baked system that is socialism on the cheap, substituting employers for the government where possible. This leads to a lot of well meaning people to advocate full socialism for medicine – the single payer system. They are convinced that in this case, full socialism will work. The problem is, full socialism never works, and shouldn’t be tolerated for something as important as healthcare. The real answer is to end the partial half-baked socialism by getting employers out of the picture and get a market (yes, a well regulated one) in healthcare going. 

Tags: healthcare

The Canadian Medical Association is happy that the Canadian Healthcare system is fair when it takes far too long to provide treatment. By that they mean that rich people wait just as long as poor people for their “elective” surgeries. The lead investigator said, “In a system of mixed private and public, and people buy their way to the front of the line, equity isn’t an issue. That’s not what the goal of the system is. But so long as there is this effective monopoly, we have to be sure that we’re being fair to everybody and not discriminating on the basis of social position. And we’re happy in this instance we’ve shown that.” Well, fine and dandy. But the report didn’t address the difference in wait times for wealthy Canadians who came to the United States to have their elective surgeries done — thus buying their way to the front of a different line. It only took them seven years to complete the study — which is considered speedy for Canadian medicine.

Tags: healthcare