The Anti-Hanson on Health Care
By Arnold Kling
John A. Nyman has a theory under which it is efficient to stimulate health care spending with health insurance.
When the care that was deemed to be welfare-decreasing is reclassified as welfare-increasing, health insurance becomes much more valuable to consumers than health economists have hitherto thought it was.
I agree that if you take all of the cost-ineffective medical procedures that people undergo and “reclassify” them as welfare-improving, then by golly health insurance becomes more valuable. But if Nyman were to debate Robin Hanson on the empirical realism of this, my money would be on Hanson.