The devil is in the details

Austin and I have been up and back this morning on the odd ways people have misinterpreted this post.  Avik Roy weighs in by talking about the fact that while health care is different from other markets, in that it does involve life-or-death decisions, that those aren’t as common as we think:

It turns out that the true range of life or death decisions in health care is rather narrow. If a poor woman gets hit by a bus and is sent to the ER, we all agree that America should come together and pay for that woman’s care: and, in fact, we do pay for it. If a physician makes a mistake, causing a patient to die or suffer disability, we have malpractice litigation for that—i.e., this is a problem upon which government-subsidized health care has no impact.

It would benefit those who believe that health care is incompatible with the free market to refine their arguments. A stronger liberal argument for socialized medicine would be: let’s let the free market reign in those areas of health care that are most like the rest of the market economy (i.e., non-catastrophic and elective care), and instead focus on socializing the aspects of the system that are most unlike the rest of the economy (i.e., catastrophic care).

I don’t disagree on his initial point – as a pediatrician I rarely have to deal with life-or-death decisions with my patients.  I do, however, need to deal with significant quality-of-life issues.  All the time.

When Avik calls for a stronger liberal argument, he’s ignoring the fact that many have been making it for a while.  I, for instance, have no problem with using the free market for some things.  I said this just two weeks ago:

I come down somewhere in the middle.  I’d say that for the stuff we agree everyone should get, that comprises the base set of quality health care, you ignore the moral hazard.  We want people to get that, and we should make it as easy as possible.  But for stuff that is unnecessary – and there is a lot of it – we let people get additional insurance to cover that.  Or we cost-share that.  Or we make them pay for it themselves.

I don’t think, for instance, that insurance should pay for elective plastic surgery.  I don’t think it should pay for Lasik.  I don’t think it should pay for more expensive drugs when equally efficacious generics are available.  I don’t think it should pay for full body CAT scans or unnecessary screening tests.  I don’t think it has to pay for single rooms or fancy food or satellite TV.

All of those things – cost share away.  Free the markets.

But for things which do work and yet still are not life-or-death decisions, like asthma medications, diabetes check-ups, appropriately recommended colonoscopies and mammograms, and so on, I think that we should avoid the free market.  We want people to get that stuff, even need them to.  And even small increases in cost-sharing have been shown to dissuade them from it, resulting in bad outcomes and sometimes increased cost.

Avik and I don’t disagree in principle, we disagree on the details.  And I think if Avik looked closely, he would see that many people arguing the more “liberal” side have been making strong arguments in this fashion for some time.

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