All the Medical Care that Money Could Buy
By David Henderson
I believe we could spend our entire national income on health care. Not by frittering money away, but by spending it on goods and services that even in small ways could improve the odds of better health. (Examples below.)
I find that most people in health policy agree with that assessment, but rarely do they see its logical (and I would say obvious) implication. If we spent all our income on health, we would have nothing to eat, nothing to wear, no place to sleep. There would be only health care. Since that’s clearly an undesirable state of affairs, it must be good for people to refrain from obtaining all the useful care that money will buy. Further, such restraint needs to be exercised quite often.
So writes health economist John Goodman. He gives examples of expensive tests that make things marginally better, in an expected value sense, but that, if done by many people, would bankrupt them. It’s interesting how even many economists don’t seem willing to apply the same filters to spending in medical care that they apply to other goods. It’s not about risk of death per se. People, after all, are allowed to buy cheaper lighter cars in which, ceteris paribus, they’re more likely to be killed in an accident. I think it’s more that we’ve had such extensive government involvement in medical care and health insurance for so long that people think of unlimited health care as some kind of right.
By the way, one side benefit I get from John’s posts is the music he plays from the 1960s and 1970s.