Monday, November 3, 2014

On Healthcare Spending Consuming most of the Increase in Income for Lower Income Earners

Tom Nagle writes:
I think it is pretty obvious why poor people are more harmed by the increase in health care costs than higher income people are. Much of the increase is a result of increases in mandated coverage for things like psychological counselling, birth control products, in-vitro fertilization, "lifestyle drugs", and very high cost treatments that merely delay death from a terminal illness. These are all things that a high income person might likely purchase (outright or via insurance) without a government mandate, but that a lower income person might be more likely to forego in order to have more income to spend on other things. The widespread satisfaction with health care among people in the UK and even Canada, despite the things not covered in the public healthcare system, is one indicator that the majority of people in developed countries would prefer to pay for less health care than government requires people to buy in this country. If it were legal in America to sell coverage equal to the Canadian system's coverage at the Canadian system's cost, I suspect it would quickly win the largest market share.
Posted November 1, 2014 6:02 PM

David R. Henderson writes:
Well said, Tom. In a speech I gave on health care once, I said, “I don’t want to mandate Canadian style health care for the United States; I want to allow it."
You could go further and say lower income people would mostly prefer to take more risk with say less educated providers and so the system of licencing in the USA states is excessive.
I am also almost certain that Government in the USA could provide taxpayer funded medical care for all citizens for less than it spends now in medicare and medicaid, if it only funded evidenced based medicine. That is if it refused to pay for treatments that do not have evidence that of net positive outcomes. This would not be death panels but refuse to pay panels, people could pay for any additional treatments.
The expensive medical care treatments generally yield very low returns to health.

No comments: