Agoraphilia

Wednesday, May 7th, 2003

Glen Whitman continues his discussion of socialized medicine on his Agoraphilia site:

Healthcare and health insurance are not the same thing. As Amy observes, you can buy healthcare without having health insurance, and you can have health insurance that does not pay for certain kinds of healthcare.
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If you give people a choice about how much free healthcare to consume, a great many of them will consume as much as they possibly can. They will continue to buy healthcare goods and services long past the point where the benefits justify the costs. This is particularly true with regard to optional procedures designed to boost quality of life, such as acupuncture and massage therapy. But it’s also true of various aspects of other, more “serious” procedures. Given the option, people will stay in the hospital for longer stays, always choose the private room, take more pain medication, opt for name-brand over generic medicines, demand more frequent nurse visits, sign up for an extra month of physical therapy, etc. And while nobody chooses to have terrible conditions like, say, lung cancer or AIDS, they do choose how much to expose themselves to the risk of such conditions through their choices about smoking, drinking, eating, sex, and so on. When you insure people against risks, they tend to take greater risks; this phenomenon is known as moral hazard. The only way to assure that people purchase healthcare products if and only if the added benefits exceed their added costs is to face them with a price at the point of sale.
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Trying to make healthcare free is a good way to make it more expensive. [...] If you’re unwilling to face people with a price for their choices, the only other option is to limit their choices via bureaucracy and/or queuing.
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Liberals, listen up: Socialization encourages regulation of lifestyles. Why? Because as healthcare becomes increasingly expensive (see previous point), political pressure will mount to get costs under control. Once everyone is paying for everyone else’s care, your personal lifestyle choices are no longer just your own. The argument that your actions “don’t hurt anybody” no longer flies, because your risky choices affect everyone else’s expected tax bill.

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