A Manager's Perspective on Health Insurance
By Bryan Caplan
A while back, I wrote:
Yes, health insurance is bundled with jobs. But markets bundle lots
of products, and I see no evidence that this bundling undermines
reputational incentives in the least. Think about a typical
restaurant. It bundles many kinds of food, plus service, decor,
cleanliness, and location. But restaurants’ concern for their
reputations leads them to maintain quality on all of these dimensions. Admittedly, it may be hard for any one customer to get exactly the
combination of food, service, decor, cleanliness, and location he
wants. But if the restaurant can make a significant number of
customers happier at a reasonable price, it will.
Just theory, you say? Here’s Don Boudreaux’s view from the trenches:
When I served as president of the Foundation for Economic Education
(1997-2001), I was impressed by the vigorous sales pitches that
different insurers made to me in their attempts to persuade me to offer
their policies to my employees. And these insurance salespeople never
failed to point out to me what a good recruiting device this or that
splendid feature of their health-insurance policies would be in
attracting and retaining good employees.
Does anyone else who’s actually been in Don’s position have experiences they’d like to share?