The debate on the previous thread, along with PPACA (or ACA, as now seems to be the increasingly common terminology) discussions at the League of Ordinary Gentlemen and elsewhere have got me thinking about the health care market. Not the health insurance market, mind you, but the health care market. So let me throw out some incompletely formed thoughts on the matter. Let me note a few things upfront. First, I am purposely taking a non-normative approach on this, so normative critiques will be beside the point–I want to figure out a positive statement of how the world is structured, rather than–at this moment–talk about what we ought to do. Please feel free to critique that positive statement, but please try to avoid jumping immediately to normative claims. Second, I’m just feeling my way here, so if you have a critique, please approach it in a manner of people working together to come to an understanding. If you prefer just to attack and condemn, I’m not particularly in the mood for that right now so I’ll probably just delete those comments without response. That doesn’t mean you can’t be blunt if you think I’ve made a factual error–I’m not a delicate flower, but I do want this thread to stay on point and be productive.
So here’s the initial point of consideration–the common claim that the health care market is fundamentally different from other markets. I think this is untrue, that health care is different only in degree, not in kind. To get there, we have to begin with a simplified model, looking at the health care market absent insurance.
The most common claim I’ve heard is that in the health insurance market you can’t shop around. After all, if you have a heart attack or stroke, you don’t have time to shop around. But A) this is not unique to health care and B) it assumes a false temporal starting point.
Granted that in most markets you can shop around at the point you’re ready to purchase, but not in all other markets at all times. Let’s begin with a simple example. One year I taught at a University 400 miles from home, so I came home only on weekends. This required two cars, one for my wife while I was gone during the week, and one for me to drive back and forth on weekends. When one car suddenly went to auto heaven, we had precisely one weekend to shop for a used car for my wife to drive. In that case, there was very little shopping around. I am not claiming that this is remotely as serious a problem as shopping around for a hospital after a heart attack, but it shows that the latter is only a more serious problem, not a unique problem. As it turned out, we ended up with a piece of shit car that ultimately cost us more than twice it’s original cost in repairs. We kept that p.o.s. limping along for a number of years (rarely daring to drive it far from home) until it finally went to car hell. That was in the summer, when we could get by with only one car, and we spent several weeks carefully shopping for a replacement, test driving several, refining our price/quality expectations, and having our mechanic look closely at our tentatively-chosen vehicle before we committed to it. That’s how the car market can work, but our other experience shows that sometimes it works more like the emergency health care market, precisely because we were in a sort of emergency situation.
But even more, shopping for a heart surgeon doesn’t have to begin only after a person has a heart attack. If I know I am at risk of heart problems, I should begin shopping early, just as I actually began my consideration of replacement cars long before the p.o.s. died, so that when it died I had a clear idea what I wanted in a replacement. Of course sometimes people really don’t know they have heart problems until the heart attack strikes, but in this case there are proxies that can help them choose, namely their primary care physician. That’s really not very different than me relying on my mechanic to help me select a quality used car. Granted, using proxies often indicates an imperfect market, one where full information isn’t available to all consumers in a timely manner, but the key point here is that this is not unique to the health care market.
Finally, there is the issue of severity and affordability. My crappy used car doesn’t compare, either in price or severity of consequences of a bad choice, to selecting a bad heart surgeon. But again, while this is unusual it is not unique. First, consider that truly bad heart surgeons are likely to be weeded out–more so than lousy used cars–so that the odds of getting a truly bad one are much lower than the odds of getting a p.o.s. car. But also, there are other cases where people can’t afford a product they need and the consequences are life and death. For example, I know a family that went without heat or hot water for an entire Michigan winter due to loss of jobs. They survived, but it’s not impossible they could have died. Or take the case of someone who’s air conditioner goes out during a heat wave and can’t afford a new one, or who can’t pay their electric bill–that’s not a hypothetical.
So what is it about the health care market, absent any considerations of insurance markets, which I’ll get to in a subsequent post if I have time, that is unique, or at such an extreme of degree that we need to functionally treat it as unique?