Health Care

Fantastic article on why the right is wrong on health care. Here's one of the key passages:

But perhaps the biggest objection to consumer-directed health reform is that its advocates have misdiagnosed the problem. They believe that Americans have too much health insurance; the 2004 Economic Report of the President condemned the fact that insurance currently pays for "many events that have little uncertainty, such as routine dental care, annual medical exams, and vaccinations," and for "relatively low-expense items, such as an office visit to the doctor for a sore throat." The implication is that health costs are too high because people who don't pay their own medical bills consume too much routine dental care and are too ready to visit the doctor about a sore throat. And that argument is all wrong. Excessive consumption of routine care, or small-expense items, can't be a major source of health care inefficiency, because such items don't account for a major share of medical costs.

Remember the 80–20 rule: the great bulk of medical expenses are accounted for by a small number of people requiring very expensive treatment. When you think of the problem of health care costs, you shouldn't envision visits to the family physician to talk about a sore throat; you should think about coronary bypass operations, dialysis, and chemotherapy. Nobody is proposing a consumer-directed health care plan that would force individuals to pay a large share of extreme medical expenses, such as the costs of chemotherapy, out of pocket. And that means that consumer-directed health care can't promote savings on the treatments that account for most of what we spend on health care.

The administration's plans for consumer-directed health care, then, are a diversion from meaningful health care reform, and will actually worsen our health care problems. In fact, some reformers privately hope that George W. Bush manages to get his health care plans passed, because they believe that they will hasten the collapse of employment-based coverage and pave the way for real reform. (The suffering along the way would be huge.)