Home > Uncategorized > Why Health Care Challenges Conservatives – Bloomberg

Why Health Care Challenges Conservatives – Bloomberg

February 8, 2013 Leave a comment Go to comments

But the bigger problem is an ideological block. Conservatives love markets too much to admit that the health-care market can’t be made to work very well. Doctors face an array of legal and economic incentives to overtreat. Patients lack good information on both prices and effectiveness. They’re also intimidated by highly educated providers whose advice they reject at their peril. Records are a mess, leading to repeat testing and treatment decisions made in the absence of valuable information.

Not all of these problems with the market can be fixed through better policy. Economic incentives for overtreatment don’t just come from subsidies. They come in part from the fact that an individual’s health-care costs are unpredictable, requiring insurance, and that health risks are much harder to underwrite than, say, driving risks. In other cases, problems in the market come from policies that nobody wants to change; few people want to completely eliminate government backstops that finance care for people who cannot afford it, even though these subsidies distort the market.

Because the health-care market cannot be made to work things out on its own; approaches to health-care cost control have to be holistic. You have to figure out how the market can be improved so it leads to better consumption outcomes, where valuable market forces are being inhibited, and when top-down regulation is the best solution to address a market that is malfunctioning. Yet when conservatives talk about health-care cost control, their first and only instinct is to shout “markets markets markets.” The result is that conservative approaches to cost control are never really going to be any good.

It’s a symptom of a broader problem: On the topic of regulation, conservatives are stuck in the 1970s. At that time, the federal government was imposing lots of dumb regulations of markets that really should have been left to work without interference: trying to control inflation through wage and price controls, setting airline fares and shipping rates, telling banks how much interest they could pay on savings accounts.

via Why Health Care Challenges Conservatives – Bloomberg.

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