Becker & Posner on Health Care

I'll shill for the The Becker-Posner Blog one more time. Two professors at Chicago University weigh in with a serious look at a topic.

This week they discuss President Bush's Health Care initiatives.

In thinking about reforms it is crucial to recognize that the American system has many strong features that should be preserved, such as the predominant role of private physicians, private hospitals, and private HMO's that compete against each other for patients and health care dollars.

I won't excerpt much because the beauty of these is their completeness. Without being long winded, both Professor Becker and Judge Posner provide comprehensive -- and frequently counterintuitive -- looks.

Neither of them take the uninsured as a serious issue. Americans without health insurance is the "Global Warming" of sociology. We've been forced to accept it as a serious issue from brute inculcation. Posner's comment agrees about the uninsured.

The fact that millions of people have no health insurance does not strike me as a social problem. It is true that they are free riders, but so to a considerable degree are the insured, since their premiums don't vary much or at all with how much health care they obtain. As Becker points out, the quality and conditions of charity medical treatment (such as long queues in emergency rooms) discourage overuse of "free" medical care--it isn't really free, because the nonpecuniary costs are substantial; among those costs are the fear and discomfort associated with medical treatment.

Posner also has an innovative solution that you won't hear a lot on the campaign trail:

The best, though politically unattainable, reform would be to abolish Medicare, brutal as the suggestion sounds. Then people would purchase catastrophic or other medical insurance for their old age, or depend like the young on charity. If it were thought "unfair" to make elderly people of limited means pay for their entire costs of health care, there could be a subsidy, but it should be means-tested, unlike Medicare. Why taxpayers should pay the medical expenses of affluent oldsters, of whom there are a great number, is an abiding mystery, at least from an ethical as distinct from a political standpoint.

Read both whole things.

Economics and Markets Posted by jk at January 31, 2007 11:33 AM