Sunday, June 08, 2003

This essay by Arnold Kling is an interesting analysis of the health care system:
When in a previous essay, The Statism Trap, I alluded to the problem of socialized medicine, one reader provided aggressive feedback. He was adamant that health care is so expensive that the only way people can afford it is if the government pays the bill.

Anyone who believes that we can afford collectively what we cannot afford individually is delusional. Based on my experience with the reader's feedback, this delusion appears to be untreatable. However, I think it is important to point out this peculiar mental illness.

Suppose that a group of friends is getting ready to go out for dinner. At first, they consider a fancy restaurant, but then it is pointed out that the price of a meal there is higher than anyone in the group can afford. Somebody pipes up and says, "That's ok. We can just split the check." Does that make sense?

Paying for health care with taxpayer dollars means splitting the check for health care. Health care costs do not diminish. Quite the contrary. Just as splitting the check at a restaurant tends to lead people to order more expensive meals than what they would order on their own, insulating individuals from the cost of health care decisions tends to make them less cost-conscious in their health care choices.


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