An Apple a Day Keeps Government Health Care Away

It has been a while since I've posted, but I was compelled to provide insight into the "Public Option" also affectionately known as HR 3200. The full text of the bill can be found here.

I am still in the process of reading the bill, as it is 1,017 pages long.

Here's the introduction, as stated in the bill itself:

(1) IN GENERAL- The purpose of this division is to provide affordable, quality health care for all Americans and reduce the growth in health care spending.

(2) BUILDING ON CURRENT SYSTEM- This division achieves this purpose by building on what works in today’s health care system, while repairing the aspects that are broken.CommentsClose CommentsPermalink

(3) INSURANCE REFORMS- This division--CommentsClose CommentsPermalink

(A) enacts strong insurance market reforms;
(B) creates a new Health Insurance Exchange, with a public health insurance option alongside private plans;
(C) includes sliding scale affordability credits; and
(D) initiates shared responsibility among workers, employers, and the government;tsClose CommentsPermalink


CommentsClose CommentsPermalink


CommentsClose CommentsPermalink


CommentsClose CommentsPermalink

so that all Americans have coverage of essential health benefits.CommentsClose CommentsPermalink

(4) HEALTH DELIVERY REFORM- This division institutes health delivery system reforms both to increase quality and to reduce growth in health spending so that health care becomes more affordable for businesses, families, and government.

The first thing I notice is that the general purpose is for government to "provide" health care. But that's not all -- it aims to reduce the growth in health care spending as well. After that, I expected the next sentence to mandate that gravity stop weighing Americans down.

What is wrong with the current system? As far as I can tell, the only issue that people are addressing is that the cost of medical procedures and visits to the doctor is often higher than what they would like to pay. Certainly no one *wants* to go to the doctor or *wants* to have surgery, let alone pay for it.

So what is the alternative? We know from economics 101 that if we control costs through regulation -- let's say we mandate that health care is free -- that suddenly demand rises and instead of allocating health care to those who value it most, we have to use other methods of allocation, such as first-come, first-serve, lotteries, relying on connections, etc. Health care, while it may become "cheap" becomes more scarce because it can't keep up with demand. I know what many of you are thinking, "People don't particularly enjoy going to the doctor -- how is demand going to increase?" Here's one way. Suppose that I have to bear the full costs of my decisions, good and bad, and I am contemplating taking up smoking, excessive drinking, and eating copious amounts of grease-laden food. I may think twice about engaging in unhealthy behavior if I know that I will have to bear the cost of medical procedures that become necessary as a result. However, if I know that the cost is a "shared responsibility" as it states in the introduction to HR 3200, I am more likely to engage in unhealthy behaviors now because the future cost is lower.

As I've said in previous posts, the extra few ounces of prevention that we take when we bear the full cost of our actions make a big difference. Knowing that a doctor's visit will cost me at least provides some motivation to ensure that I wash my hands thoroughly, that I put bandages on cuts, that I get adequate sleep, that I eat a balanced diet.

But what happens to that "ounce of prevention" when you institute "free" health care? Suppose that apples cost $1 and doctors cost $0. Following the "an apple a day keeps the doctor away" saying really isn't compelling when doctors are cheaper than apples, is it?