Thoughts on Health Care
- Health care is the epitome of many political solutions where the anointed wish to provide benefits (in exchange for votes) without paying for them. They create Rube Goldberg systems of cross subsidies, mandates, tax benefits and penalties, and regulation to hide the true costs, especially from themselves.
- Restricting supply and channeling vast sums into the market through policy, tax preferences, etc will almost scientifically increase costs including the stupid salaries of healthcare executives.
- The controversy is so strong IMO because this issue encompasses the core differences in economic and political ideologies.
- In the absence of true fundamental reform, which seems politically impossible (true insurance, individual ownership, consumer responsibility and pressure) we seemed doomed to tinker at the edges. Regulation and mandates should be few and simple – community rating, pre-existing conditions….
- The real challenge for me comes when there are critical breakthroughs in diabetes, Alzheimers, cardiac, from advances in AI , genetics and other frontiers which will render much of our capacity unnecessary. In the first Act breakthroughs are hugely profitable and costs are high- by act three technology plummets in price and the features only the rich could afford become cheap and common place. The problem is that it is a very long first act and we risk the audience leaving before the end of the play.
- Baumol’s The Cost Disease adds some perspective to the health care inflation- largely due to the increase in productivity from the industrial sectors. One reason we spend more on health care is because we can.