Letters to the Editor
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Response to JackAckroyd & Anonymous
Jack, I think you and I do have a disagreement about how reality works.
You're response starts with "To begin with, nobody has an incentive to "get as much service as possible regardless of cost" when you're talking about health care, because such service is both unpleasant, and results from undesirable events."
I disagree with your assertion that somehow health care is unique and doesn't obey the normal cost/benefit intuition that all of us apply every day. Some things that I think would make it possible to determine what reality is is to have some set of facts about where the money goes for healthcare. My guess is that the average person's healthcare costs rarely include invasive, painful procedures. Instead, they tend to include numerous tests after tests and then lifelong prescriptions for medications. For example, I only know of one person is my rather large extended family who had a serious surgery. But, everyone I know over the age of 40 are on medications and routinely have repetitive tests to monitor certain variables in their health.
My view is that if the customer were the one paying for the day to day care, they would in fact ask for fewer tests rather than pay for them. For example, they would likely forego CAT scans for headaches if other common tests and the doctor's experience said that all they have is a headache. But, when someone else is paying, well then, sure they'll take the CAT scan.
Now, I fully agree that people should purchase insurance to cover catastrophic costs for the complex procedures you describe that most people never want. Because most people never need these, these costs can be spread across a risk pool through insurance.
To "Anonymous"
Your assertion that healthcare is a need while the TV in my analogy is not has some partial truth but is not entirely true. The true part is that in situations like auto accidents or life-threatening diagnoses like yours, the person has a need. As I mentioned above, this need can be met with insurance that covers catastrophic situations because most people do not have the problem. The risk calculation that you seem to believe is not possible is no different than the same type of mortality calculations that life insurance companies provide.
Now, the part that is not true is that the vast majority of healthcare in this country is not for catastrophic situations. Restless Leg Syndrome, Acid Reflux, Blood Pressure, Migraines, Depression, etc are maintenance healthcare where the market place will work wonders in matching the willingness of people to pay to the desire for companies to make a profit. And, the really neat thing is the profit part of the health system is what moves things from catastrophic to maintenance. HIV/AIDs used to be catastrophic. It's on its way to being a maintenance issue. It is not there yet but compared to where we were in 1990, people are now living fairly normal lives and we just need to have the market work a bit more to get the costs down. Having a reasonable patent period is the challenge here because the investors in R&D need a return on their up-front costs while the expiration of the patent provides the ability for the costs to drop dramatically. I agree that the balancing of the patent period is a function of government. This also happens to be the view of the Founders since copyrights/patents are mentioned in the Constitution.