Friday, April 08, 2011

Examining My Priors: Health Care Edition

I look at health care and I see the rand study, which appears to be backed up by this recent study, and see health care cost inflation as primarily a function of the 3rd party payment system and a lack of cost sharing. So to me, the ideal health reform would feature creating a universal risk pool and mandate people to buy a naked high deductible health plan with premium and deductible assistance for the poor. I take it as a given that if people have an incentive to economize that they will comparison shop and this will force providers throughout the system to innovate in how they deliver care. However, I think the greatest weakness in this view is that it treats health care as a normal good and presupposes people will be unabashed in getting the best value for their dollar. But people don't always approach health care as a function of healing. A lot of health care involves signaling how much you care. So it's possible in my market driven health care utopia what in fact would happen is that health care would be a proxy for loved ones to demonstrate their love and care for others by spending exorbitant amounts.

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