On the US healthcare system:
We need to move to a system where most people pay most medical bills out of pocket, and insurance companies step in only when the costs are completely unaffordable. To get there, we need to eliminate the deductibility of health care costs. Why should health care be deductible on income taxes when food is not? Food is way more important to your health than is a doctor’s care. So is exercise, but neither one is deductible.
The Angry Economist, American Health Care is Totally Broken
When Helen was studying for her MSc in Comparative Social Policy and was telling me about the need to control markets and profits and so on in our health system (in the UK), and contrasted it with various other systems in the US, Canada and France in particular, I wondered why we thought it necessary to intervene in the Health market, because health is terribly important, but not in the Food market, as if that wasn’t important.
I suppose you could say that good enough food is available to all as a matter of fact. Perhaps it’s the free market that’s made that the case, of course.
Harford’s book relates problems in health insurance markets to Akerlof’s work on adverse selection, or the ‘lemons’ problem (as in, buying used cars that are so-called ‘lemons’). He agrees that a private insurance solution will be patchy, costly, bureaucratic, and present patients with choices they’re not equipped to make. Unfortunately, he points out that Government-provided solutions tend to fail also.
If I remember rightly, The Undercover Economist ends up hinting that the Singaporean health care system has quite a lot to recommend it: big unpredictable health problems are covered by the Government through taxation and the rest through private insurance.