The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants

An Economics Argument

By Austin Frakt PhD

The Incidental Economist

Originally Posted: 14 Feb 2010 03:58 AM PST

Let’s say the cost per saved life due to providing an additional individual with health insurance is X dollars (Tyler Cowen says X = $9 million; I say that’s an overestimate). If one thinks X is too high, what’s the right policy response? One answer is to extend insurance to fewer people. The other is to try to reduce the cost of care so that X is lower.

The Differential

There is a huge difference between these two responses. I won’t go into all of them now. One important difference I want to highlight is that if we simply reduce the number who will become insured then the rest of us are still left paying exorbitant health care costs. Thus, two problems remain, many are left uninsured and health care costs are still too high.

Cost Reductions

On the other hand, if the policy response is to reduce the cost of care then we all win. More of the uninsured can be insured for some level of funding and the rest of us can benefit from lower health care costs. That’s a double victory.

Assessment

That health reform is too expensive is not a good argument for doing less of it*. It is an argument to do more. The provision of health care will not become more efficient under the status quo. And, the status quo (with perhaps minor tweaks to it) is what we will get if health reform does not pass this year. But, if reform does pass it sets the stage for more reforms, and ones that focus on costs.

*Note: I’m not saying I think it is too expensive. But if you do think it is I do not find that a convincing argument not to do it.

Link: http://theincidentaleconomist.com/save-fewer-lives-or-save-lives-more-efficiently/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheIncidentalEconomist+%28The+Incidental+Economist+%28Posts%29%29

Conclusion

Your thoughts are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Get our Widget: Get this widget!

Our Other Print Books and Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Subscribe Now: Did you like this Medical Executive-Post, or find it helpful, interesting and informative? Want to get the latest ME-Ps delivered to your email box each morning? Just subscribe using the link below. You can unsubscribe at any time. Security is assured.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Sponsors Welcomed

And, credible sponsors and like-minded advertisers are always welcomed.

Link: https://healthcarefinancials.wordpress.com/2007/11/11/advertise

Filed under: Health Economics, Health Insurance |