Government and Health Care

I'm probably the last person you'd want analyzing our nation's health
care problems. If I ever become president, I'd gladly cede that issue
to my wife, who's quite knowledgeable on the subject. (And hopefully,
by then people will have forgotten how that strategy turned out in the
1990's.)

But I did want to put my two cents in on one aspect of the issue. I'm
a big fan of putting more market mechanisms into things that have
gotten sloppy because of their lack of them. But this move towards
"consumer-driven health care" is a tricky one. On the one hand, it
makes sense, because while doctors and hospitals may have medical
expertise, their motivations aren't always the same as that of their
patients. However, on the other hand, while patients are most
motivated to look out for their own health, they may lack the medical
expertise to make good choices about treatment options.

Governments have neither medical expertise nor aligned motivations.
But I could see them playing an important role on issues of overall
public health. Let's say, for example, that consumer-driven health
care becomes the norm in this country. People have medical spending
accounts, which keeps them from pursuing unnecessary treatments and
pushes them to shop around for the right treatments. Doctors and
hospitals have to compete for their customers just like every other
business: on service, on price, and on quality. All is good, right?

Not necessarily. I would venture to say that if people were in charge
of their consumption of health care, they would tend to under-consume
a lot of things that they ought to consume but don't feel like
consuming. And those things that they would under-consume would be
things like prostate exams and mammograms and smoking cessation
programs and other preventive measures. The kinds of things where an
ounce of prevention really is better than a pound of cure. The kinds
of things that doctors and hospitals are already having trouble
getting patients to take the time for. The kinds of things, then,
that if people are in charge of their own health spending, will get
under-consumed.

And that'll lead to more expensive interventions later: expensive for
people, and for society as a whole. So there's a market failure that
governments could shore up. In fact, many state and local governments
are doing a lot of this kind of stuff already, helping their citizens
quit smoking and eat right and pursue healthy lifestyles. Even we go
all-market on health care, I hope there's a way to add this piece of
government intervention into the market, so that there's a more
societally beneficial level of consumption of these kinds of
preventive measures.