Health Care Costs Are Not Out of Control. Health Care Consumption Is.
Until somebody listens, I will keep shouting that it is not health care “costs” that are out of control. It is the utilization of medical services. To put it in terms that will provoke some, it is the consumption of medical care.
There are many procedures for which the benefits are small or speculative. Often, the patient gets a ray of hope, or comfort that doctors are making an effort. Less often, the procedures improve the outcome.
See full post by Arnold Kling at Econlog.
I would argue we don’t actually know whether medical costs are too high or too low. Moreover, we don’t really know whether consumption is too high or too low. We haven’t had a health care marketplace free of distortions to discover the market-clearing price and quantity for medical services.
Good observation.
I like Arnold Kling. When is he going to come speak for NCPA?
Because Health Care is a finite resource we must have rationing. Who best to ration – the patient; or the insurance. For too long we have defaulted to the insurance who have come up with schemes to ration- HMO, Managed Care, ACOs etc. Or with Obamacare we let the government ration. Who thinks that will improve this process? How about we give to money to patients and let them ration themselves?
I may be missing the distinction, but when health care costs rise at twice the rate of wages, I’d say that qualifies as “out of control.” Is overutilization caused by the fact that the consumer does not bear the full cost of the health care he consumes? I probably have that backward…
If we are over-consuming it should relate to higher competition between providers in order to capture those consumers which should drive down prices and improve quality. Neither is happening.