[PEN-L:9426] Re: RE: Re: Shades of Summers

[Brad De Long <delong@xxxxxxxxxxxxxxxxx>]

> >>
>Uwe Reinhardt, a health-care economist at Princeton University, writes that
>"Efficiency very often doesn't please consumers,"
>
>That's because, like many mainstream economists, he confuses efficiency
>with profitability for capitalist enterprises or the operations of "free
>markets" (as in free trade is efficient even if it encourages pollution),
>despite the fact that individual profitability and unfettered markets are
>not the same as efficiency even in the official neoclassical doctrine.
> >>
>
>I think UR's point is being misstated here.  He makes
>no reference to profit, direct or indirect.  What he's
>driving at is that people consume services that, on
>the margin, are not worth their cost.  By forcing
>people to pay 'on the margin,' there is pressure to
>reduce "uneconomical" consumption.
>
>Now there's lots of reasons to criticize this point,
>but it speaks to a welfare concept that is not
>fundamentally pitched to the interests of capital,
>even though in a superficial sense it serves the
>interests of the HMO's in question.
>
>For instance, efficient consumption is not fair if the
>underlying distribution of income is not fair.
>Those who can afford to choose to consume are the ones
>who will, and those who can't will suffer from loss of
>the service.  Those less able to pay will bias their
>decisions towards taking more risks with their health.
>Patients are not well-equipped to gauge the necessity
>or benefit of a service, aside from their ability to pay.
>
>In the U.S., if we universalized a system where health
>care was "free," we would see greater increases in the
>share of GDP devoted to health care.  This ought to
>raise a concern about whether the foregone output might
>have been more worthwhile....
>Socialists have to ration too.
>
>mbs

Hmmm... My view was that people hate going to the doctor--it takes a
lot of time, and it is scary at a pretty deep level--and thus that
the psychic cost of showing up at the doctor's office was already
(for most people) more than enough to put worries that free care
would be unnecessary and wasteful care on the back burner...

On the other hand, I vaguely remember seeing estimates of "medically
unnecessary and inappropriate" medical care in the U.S. today that
amounted to a quarter of total spending...

I can't reconcile these two. I'm out of my depth...


Brad DeLong