Friday, June 19, 2009

Health Care v. Health Insurance.

Gary Becker writes recently about arguments used to disparage the U.S. health care system:

Instead, the American system has sometimes been found wanting simply because life expectancies in the United States are at best no better than those in France, Sweden, Japan, Germany, and other countries that spend considerably less on health care, both absolutely and relative to their GDPs.

...Although such calculations show that improvements in life expectancy are worth a lot to most people, national differences in life expectancies are a highly imperfect indicator of the effectiveness of health delivery systems. For example, life styles are important contributors to health, and the US fares poorly on many life style indicators, such as incidence of overweight and obese men, women, and teenagers. To get around such problems, some analysts compare not life expectancies but survival rates from different diseases. The US health system tends to look pretty good on these comparisons.

His point is certainly valid, but why should the U.S. faring more poorly on life style indicators be ignored? Is this something that is completely inaccessible by health care policy?

As the nearly clichéd argument goes, if health care is a for-profit business as it is in the United States, health care providers have an incentive not to keep people healthy, but to allow them to be sick and then treat them.

Put another way: Pfizer has just as much an interest in keeping agricultural subsidies as does a company like Cargill, and just because it's managed by a different department in the federal government doesn't mean it's unrelated to the United States' deficient health. If the connection is unclear, the particular hypothetical I'm picturing is one in which, say, the "burden"* of the corn subsidy goes directly to a conglomerate like Cargill, while foods featuring corn by-products (i.e., it's infamous fructose-enfused syrup), which are now able to undercut more-whole foods, give consumers the incentive to eat themselves into obesity and treat themselves with Pfizer-produced pharmaceuticals.

Elimination of a corn subsidy (to continue with such an example) would not only appease deficit hawks, but also correct incentives in the grocery store to encourage a healthier population. And in addition to perfectly conservative reasons why we might want a public option for health care, perhaps even a tax on overly-produced-and-thus-kind-of-fake foods might be in order to help the U.S. with it's "life style indicators."

This tax could even be a carbon tax; though there are certainly exceptions, the more energy that goes into producing your food, the greater it's association tends be with chronic diseases later in life. The system of fossil fuel to make fertilizer to grow corn to feed cows to raise and produce red meat could possibly be the least efficient energy-to-food calorie ratio available in a grocery store, for example.

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* Just as the elasticities effect who gets the burden of a tax applied to that market, so would the same effect who gets the benefit of a subsidy, though this is discussed less often.

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Update:
I didn't realize Becker's post would stir up as much blogger-ire as it did, but Paul Krugman and Andrew Gelman of 538 both have retorts to Becker's point (as also quoted by Greg Mankiw).

1 comment:

  1. "The system of fossil fuel to make fertilizer to grow corn to feed cows to raise and produce red meat could possibly be the least efficient energy-to-food calorie ratio available in a grocery store, for example."

    A great post, and I particularly liked that you mentioned this bit.

    ReplyDelete