Tuesday, April 15, 2008

A late in coming conclusion

Tonight I was reminded of a time in school when I gave a presentation on US health care regulation. I tried to lay out its forms, vehicles, and operations. It was such a complex topic that I struggled greatly to adhere to the time limit. In the end it was a pretty pitiful performance. Not one of my better efforts, but in truth I didn’t feel anyone would appreciate it even if it was. At the end of the presentation I was asked if I had a conclusion. “No not really.” I stammered. “It’s an important issue and it is important to be informed”—was all I could muster.

Although I did have a conclusion. However, I was reluctant to give it since its presentation would reveal my bias which could question the integrity of my research. (I think I have learned now that we all have a bias and not to reveal it is the real signal of questionable integrity). So if I had the question again the following would be my answer.

My research was presented with the intention of drawing a focus to the myriad of regulatory complexities that our health care/health insurance industry is riddled with. The chief effect of this regulation is a loosening of the association of cause with effect. It is through clear feedback mechanisms that intelligent beings are able to change a course of behavior in hopes of creating improved outcomes. Just as punishment of a dog an hour after it has overstretched its bounds is futile, paying for health benefits through tax revenues and insurance programs also confuses the costs of prior behavior. The regulatory complexity removes health decisions from the universe of practical everyday decisions. These sorts of decisions are feasibly within human abilities. Granted errors are made constantly, but on average people are able to decide which products work best for them; and in the process reward those goods and services that hold value. This simple, but essential mechanism is constantly under attack in the realm of health care.

But you say: “Health care is different from other goods. We NEED it. Without it we would die.” Would you die without food? shelter? clothing? And if so are you able to reliably find those goods with high quality and at low costs? And what sort health care would you really die without? There are rare incidences when people suffer from a critical circumstance, but every trivial health benefit is covered in these third party plans; and the benefits are growing all the time. And what does “need” mean anyways? Does need mean if it was cheaper you would consume no more of it? Does need mean that you would sacrifice literally everything you own to obtain it? With any procedure there are costs and benefits, but we seem to be unable to consider the alternative that for any procedure the cost could exceed the benefit. Yes, these procedures still have the same costs no matter who pays for them. It’s a scary thought to think of someone empowered with the ability to consume without any regard for the costs. But a scarier thought is that this disincentivizing trend will continue and we will fail to reward innovation that leads toward health care advances.

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