[PEN-L:9603] Re: RE: Re: Shades of Summers

[Ken Hanly <khanly@xxxxxxxxxxxxxxx>]

What evidence do you have that there would be a greater increase in share of
GDP devoted to health care. If everyone were forced to make do with the one
system health care costs would be reduced as a percentage of GDP. The US spends
a larger percentage of GDP on health care than any country that has a universal
system. The problem with the universal systems now is
that they tend to ration too much rather than too little just as with the
HMO's. The way people
like you think, you would think health care was a great consumer good so that
everyone wants more of it. Everybody will be breaking legs and arms if you have
free health care. ANd of course it is not free at all. It is paid for
collectively rather than privately.
   Cheers, K Hanly

Max Sawicky wrote:

> >>
> 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.  The lost consumption could
> be free as well.  It's fine to say total output could
> accommodate both needs, but the implications of rising
> health care consumption, if put in quantitative terms,
> would overwhelm reasonable expectations of higher output
> resulting from full(er) employment.
>
> Socialists have to ration too.
>
> mbs