Tuesday, October 05, 2010

obamacare



Ricardo:
Because it hasn’t in any other developed country in the world?Interestingly, Americans spend less than many other countries on durable medical supplies like eyeglasses, contact lenses, wheelchairs and other such things so I was a bit imprecise in saying the increases were across the board.Long-term care is another big exception.This blog series is essential reading for people who want to understand U.S. health care costs better.  



I read through the blog series. An effective statement that we have a higher ratio of health care spending to GDP than Europe + South Korea (this is an accurate portrayal of the data presented?) Talks about some of the difference in costs, but leaves a region of approximately 60% or so of the difference between the US and the EU unexplained. I was personally glad to see medical malpractice addressed.

Over all, I agree, but why? I think much of this is because a) we have shifting priorities food+shelter --> health and b) we consider health care 'free'.
Had a kid recently. Did we shop around for a best fit in price and reputation of hospitals? No. We went to the best one in the area. Why? Because employer-provided health insurance covered it.

In both socialized and private-insurance healthcare systems, there is a disconnect between those most directly paying for the goods and services and those consuming. This throws market forces completely out of whack as no individuals are being asked to see how spending hits the bottom line.

This is further exacerbated by not even making a consumer directly pay for the health insurance (which is paying for the goods and services), so consumers are removed from decision-making by multiple indirections.

If Obamacare shifted employer health insurance tax benefits to the consumer while trying to solve the insurance availability issue in some other way, I'd probably be more supportive. At least then, even though insurers don't really care about the costs of goods and services (they can often pass it along so long as there's enough regulation preventing competition), at least the consumer cares about the cost of the insurance. Right now, how much people pay for health insurance gets decided by some HR exec and actual consumers can only see it *extremely* indirectly as a hit or bonus to his/her salary.

In this case, we're trying to invoke the 'hidden hand' by gouging our own eyes out and saying "I can't see the hand, therefore it must be hidden"