It’s subscription only, but Cosmo Macero has a piece in today’s Herald on the health care system and the increasing costs it engenders. The problem in his view? Transparency of cost, or rather the lack of it.
Name another transaction where the actual cost of services is routinely disclosed to the consumer only several weeks after the services rendered.
The lack of transparency has led some - particularly employers and HMOs - to giving health care recipients some sense of what they cost and to put the onus of that cost on the consumer directly. The logic is that if consumers have to pay for elective treatment out of their own pockets, they will be more frugal in order tests, procedures or drugs. In essence, cost transparency, coupled with consumer accountability, would try to get around the moral hazard problem that any insurance system poses and that the managed care system poses extremely well.
However, two problems arise when this logic is applied to health care. First, consumers aren’t always (even usually) rational in making trade-offs between short-term and long-term well being. They may be penny wise and pound foolish in opting out of a procedure to save money now. And given our current quasi-insurance system, those long-term costs won’t be borne soley by the individuals. Second, health isn’t simply a matter of individual health. Diseases spread, bad lifestyles are taught, and even external health hazards (carcinogens in the local water supply, say) are only detected when patterns are diagnosed. Placing the onus on the consumer to opt for or out of treatment based on his or her individual economic calculation ties our hands in dealing with public health, to say the least.
So I would shy away from Macero’s suggestion (he backs away from downright recommendation) that cost transparency is the solution. Then again, to me, nationalized health care strikes me as the best route. To that end, I do agree with his conclusion on the solution of a health care ‘crisis’, “Leaving it up to employers simply hasn’t worked.”
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