As I’ve noted several times previously, EconLog’s Arnold Kling is among the clearest thinkers in the U.S. on reform of the health care finance system. He has been addressing health care finance issues again this week, first in this podcast interview with Russ Roberts, and also in posts here and here addressing issues raised by Greg Mankiw’s NY Times article on the misleading nature of certain statistics that are frequently tossed around in the health care finance debates. But the most insightful Kling health care finance post this week was this Cato-at-Liberty post in which he analogizes the third party payor health care finance system to subsidized prostitution:
Suppose we were 20-year-old guys who hung out together, and one of our friends was down on his luck with women. Heís really depressed about it. We decideñnot necessarily the brightest ideañto hire him a prostitute. We donít want him to know sheís a prostitute, so we all chip in and pay her, tell her to meet our friend at a bar, and make him feel better about himself.
Next morning, we ask him how it went. He says, ìGreat. I really feel better about myself. In fact, Iím going to see her again tonight.î
As friends of the guy, we look at each other and realize that he will be devastated if he learns the truth. So we chip in again and pay the prostitute to make our friend feel better about himself. This keeps happening day after day, and eventually maintaining our friendís illusion about his love life gets to be really expensive.
Similarly, free health care is an attractive illusion. Itís just gotten to be really expensive to maintain the illusion.
Before the blogosphere, discussion and analysis of health care finance — which has become one of the key domestic issues of our time — was largely buried in technical books, economic or medical journals and an occasional op-ed on the editorial pages. As a result, health care finance was largely misunderstood by the public and even a large segment of the medical profession. Now, through the leadership of economic bloggers such as Kling, the important issues relating to health care finance reform are instantly available for the world to review as a virtual cornucopia of economic bloggers has emerged to provide commentary and insight. That’s a wonderful legacy for Kling, and one for which we should all be appreciative.
Is anything free?
One of my friends makes frequent trips to Brown University. Once he commented on how the women in Rhode Island were very friendly. He told a story of an attractive young woman who was flirting with him in the hotel.
My daughter, then enrolled in a very rigorous political science class at Cornell College commented that they learned prostitution is legal in Rhode Island.
That burst my friend’s ego for at least 10 minutes.
How this relates to health I am not sure, but for 1200.00 a month we pay to Wellmark, they better be big time flirts…
The New York Times article presents very important information.
As a physician and child psychiatrist, I do not see totally indigent patients; most have some sort of coverage. Therefore, I would agree that the clinical experience agrees with the research data that most patients carry some kind of health care coverage.
Moreover an important point is made in the Times, that socioculture issues complicate the picture. My field is criticized for using too many medicines in too many children. However, I counter by saying: ‘If the America really wanted to reduce the psychiatric medications we dispense then it would address: child abuse and neglect, parental drug abuse, poverty, toxins in the environment, and poor schools.’ We would see a dramatic decline in child psychiatric patients whose illnesses are significantly impacted by abuse, neglect, poison, and inadequate schooling.
After spending hours arguing with insurers (read ‘Medicaid’ and read ‘Blue Cross/Blue Shield’) and the regulators (read ‘JCOHA’) it is obvious that the ponderous bureaucracy (public and private)is more deleterious to health care, than an inability to care for medically indigent patients.