Friday, October 23, 2009

Health care

I recently bought a new pair of glasses for an amazingly high price--Progressive bifocals with light-sensitive lenses. Nearly $500 at Walmart, which will be reimbursed via a use-or-loose health care spending account.

Although I like them, if it were "my" money, I wouldn't have spent nearly that much--I could have lived with my old glasses for quite a while longer, or I could have ordered traditional bifocals from a company like Zenni, starting at $25. The Zenni equivalent in features would have been around $100. I wound up getting the exact same frames as my previous glasses--If I were paying, I would have at least re-used my old frames.

This illustrates a major problem with non-patient-paid health care--there is often discressionary spending. When the person benefiting isn't the one paying, it is very hard to judge whether a particular spending is a good value. When the payor is judging, whatever is cheapest and meets their minimum obligation wins. When it is a non-paying consumer, some combination of "best" and "least effort" wins, regardless of cost.

If we must have universal coverage of some sort, there has to be some mechanism to encourage reasonable economic decisions. The patient has to benefit by taking cheaper options, but in a way that does not force everyone into the cheapest regardless of other factors. Assuming we have no choice but to offer universal health care, something like the Whole Foods healthcare system appears to be the "least bad" way of going about it--Health care savings accounts controlled by the patient (and ideally that roll over and are not tied to an employer), combined with high-deductible catastrophic coverage. Whole foods has lower costs, but higher satisfaction with this system, because patients have control of costs, and incentives to save.

It will be interesting to see what happens. In Massachusetts (with a universal system), a couple was fined because the rules changed and their catastrophic-only plan was deemed inadequate because their maximum out of pocket cost was $2500. They had to pay an extra $1000 in fines, about as much as the worst case scenario if they both were extremely ill in the same year. That was still cheaper than either the next higher option, or going with the state paid system.


  1. Remember this in 2012 when Mitt Romney ruins as "the conservative candidate." And be glad you don't live here, because of his "Assault Weapons" Ban.

  2. I'm not looking forward to the 2012 election--I don't foresee choices any better than "Eeew" and "Oh god no".

  3. I'm not looking forward to the 2012 election--I don't foresee choices any better than "Eeew" and "Oh god no".

    Agreed - Republicans don't seem to learn anything while out of power. I'd love to see a bunch of Libertarians in Congress, but that's a pipe dream.

  4. I think there's a fundamental problem with Libertarian politicians--True libertarians aren't after power. Without the lust for power, there isn't much to recommend being part of national scale politics, and we don't have enough people who are *that* altruistic.