Home > Medical/Health Commentary > The Audacity of Ignorance

The Audacity of Ignorance

I’ve been reading through the Cato Institute’s new white paper on the new health reform bill. The PPACA does a lot of different things, so it was helpful for me to see detailed exposition and analysis of most of the whole thing in one document.  There’s a lot in there to digest, particularly regarding the potential long-term impact of the CLASS Act (long-term disability insurance) program, but the passage that really caught my attention was this [in the section dealing with consumer-directed health plans, PDF page 20]:

President Obama has always been hostile to consumer-directed health care.  In his book, The Audacity of Hope, for example, he  dismisses health savings accounts as being based on the idea that people have “an irrational desire to purchase more than they need.”

Let’s leave aside the question of whether people make decisions perfectly rationally, even when dealing with health, life, and death.  Let’s even set aside the question of whether HSAs are a positive market development (my take is that they are, but that’s neither here nor there for this post).  Is it really so inconceivable that people might want to purchase more medical goods and services than they “need?”

Apparently we now live in a world in which moral hazard doesn’t exist, demand curves don’t slope downwards, patients never demand antibiotics for their colds, super-gee-whiz-ultra-shiny-full-body-CT-scans aren’t regarded as “newer and shinier” by consumers, and the RAND Health Insurance Experiment never occurred, among numerous other things that seem to have changed.

Somehow I don’t think that I’m the one who missed the memo.

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