Saturday, August 27, 2005

The Moral-Hazard Myth

Malcolm Gladwell writes in the New Yorker about the myth that national health insurance would cause people to consume more health care resources than if they had to pay for it:

The United States spends more than a thousand dollars per capita per year—or close to four hundred billion dollars—on health-care-related paperwork and administration, whereas Canada, for example, spends only about three hundred dollars per capita. And, of course, every other country in the industrialized world insures all its citizens; despite those extra hundreds of billions of dollars we spend each year, we leave forty-five million people without any insurance. A country that displays an almost ruthless commitment to efficiency and performance in every aspect of its economy—a country that switched to Japanese cars the moment they were more reliable, and to Chinese T-shirts the moment they were five cents cheaper—has loyally stuck with a health-care system that leaves its citizenry pulling out their teeth with pliers.

The so-called free market approach in this country isn't working. You can't have a free market when you're not willing to let players fail in the marketplace. We won't let people die of curable diseases, so don't pretend there's a functional health care market in America.

The insurance companies spent millions to derail Hillary Clinton's health care plan, all-the-while proclaiming that HMO's were the answer. What happened? HMO's did nothing to lower health care costs. The health care inflation rate still grows much faster than standard inflation. The cost of our company HMO plan consistently grew at 25% a year! Every year we had to eat the increase or drop benefits. We have switched providers twice, and each time we renew we face the same choice. And this is with virtually no claims.

The insurance companies are making record profits. Not just from consumers, but from physicians. The increases in physician insurance premiums are traceable to insurance company profits, not malpractice awards (which have fallen).

I've had enough. I think it's time to support a single-payer health insurance plan.

1 comment:

jamie said...

Amen! Well argued! And now I'm back to debating myself on pulling this broken tooth out with pliers. But at least I do have regular insurance.

It's interesting that Toyota opted to build a new plant in Canada, citing the lower payroll costs resulting from Canada's national health care system as one reason (the other being that some southern US workers needed someone to draw a picture to show them how to do their job).