Health Care Finance Versus Health


To echo what Ezra Klein says here, it really can't be pointed out enough that health care policy reform is mostly about improving people's economic situation so that we have fewer cases of medically driven financial catastrophe or insurance-induced labor market rigidity. Broadening the supply of health insurance should make the population somewhat healthier, and as the gains would be concentrated among the worst-off Americans the equity value would be very real, but the overall impact would be relatively modest compared to the gains available in other areas.

The most likely gains in public health would come from improvements in lifestyle factors, predominantly diet where many Americans are eating plenty of food but not enough nutrition, and exercise where many Americans aren't engaged in nearly enough physical activity. There are a lot of very cost effective things you could do on this score, but it hasn't been a topic on the political agenda and there are few interest group pressures here. I will say that one reason I think curbing carbon emissions may not be as costly as some think is that adapting to a lower carbon lifestyle would, in most instances, entail adopting a healthier lifestyle.

The other thing is that insofar as health care really can have dramatic impacts on health outcomes, the most important things tend to be the simplest and most basic ones. Here lack of insurance is a problem, but so are the vast array of supply-side restrictions. It ought to be quite cheap to get a basic tooth cleaning or medical checkup or secure a routine diagnosis and prescription. But it's generally not because entrepreneurship in medical services is strongly discouraged by the current rules, the law tends to require full-fledged doctors and dentists in situations where they're not needed, and there are incredible impediments to increasing the supply of general practitioners and so forth.

Photo by Flickr user Normanack used under a Creative Commons license