Econ 101 for the WSJ
You need to Know the Costs to Comparison Shop
You'd think the prestigious WSJ (subscriber only) would have better economists writing their Review and Outlook column. Or maybe they are just dishonest.
The column on Feb. 1, 2006 is on health care and one line is so shockingly wrong it even jumped out at me. The WSJ writes, "Though it represents one-sixth of the U.S. Economy, health care is the one industry in which the purchasers actually have no idea what anything costs. An individual market for health insurance would allow more freedom of choice while making consumers more cost conscious" See the error? The sentences contradict one another. How will consumers become more cost conscious if they don't know what anything costs.
Perhaps they mean that the reforms Bush is proposing will make costs more transparent and thus consumers will know what medical care costs but that is just foolish to believe. Transparency in health care is a fine idea but the nature of health care spending is such that it will always be difficult to comparison shop for medical treatments. Even the best health care consumer website can't quantify the intangibles of choosing a doctor to remove a potentially cancerous mole (for example). There are just too many externals to consider If you're family doctor recommends a particular dermatologist but a health care consumer website says he is on the more expensive end of the list of docs who perform this procedure, how is this information going to help you--remember this is a potentially cancerous mole--feel like taking a chance? I didn't think so.
To be fair, Conservatives are legitimately confused about how to deal with the health care spending issue. Instinctually, they believe the issue is not properly before the government but that is a problem with their philosophy not their policy.
You'd think the prestigious WSJ (subscriber only) would have better economists writing their Review and Outlook column. Or maybe they are just dishonest.
The column on Feb. 1, 2006 is on health care and one line is so shockingly wrong it even jumped out at me. The WSJ writes, "Though it represents one-sixth of the U.S. Economy, health care is the one industry in which the purchasers actually have no idea what anything costs. An individual market for health insurance would allow more freedom of choice while making consumers more cost conscious" See the error? The sentences contradict one another. How will consumers become more cost conscious if they don't know what anything costs.
Perhaps they mean that the reforms Bush is proposing will make costs more transparent and thus consumers will know what medical care costs but that is just foolish to believe. Transparency in health care is a fine idea but the nature of health care spending is such that it will always be difficult to comparison shop for medical treatments. Even the best health care consumer website can't quantify the intangibles of choosing a doctor to remove a potentially cancerous mole (for example). There are just too many externals to consider If you're family doctor recommends a particular dermatologist but a health care consumer website says he is on the more expensive end of the list of docs who perform this procedure, how is this information going to help you--remember this is a potentially cancerous mole--feel like taking a chance? I didn't think so.
To be fair, Conservatives are legitimately confused about how to deal with the health care spending issue. Instinctually, they believe the issue is not properly before the government but that is a problem with their philosophy not their policy.
posted by Ralph at 2:01 PM
0 Comments:
Post a Comment
<< Home