Wednesday, March 7, 2012

Health Care Stuff

I read a couple of interesting articles this week. This one is about abortion. It's a little jarring just because of the way some people view the ethics of abortion. I guess jarring because of my morality, but knowing who reads this blog, you would probably agree with me. Here's the story. Excerpt:

They argued: “The moral status of an infant is equivalent to that of a fetus in the sense that both lack those properties that justify the attribution of a right to life to an individual.”

Rather than being “actual persons”, newborns were “potential persons”. They explained: “Both a fetus and a newborn certainly are human beings and potential persons, but neither is a ‘person’ in the sense of ‘subject of a moral right to life’.

“We take ‘person’ to mean an individual who is capable of attributing to her own existence some (at least) basic value such that being deprived of this existence represents a loss to her.”

As such they argued it was “not possible to damage a newborn by preventing her from developing the potentiality to become a person in the morally relevant sense”.

The authors therefore concluded that “what we call ‘after-birth abortion’ (killing a newborn) should be permissible in all the cases where abortion is, including cases where the newborn is not disabled”.  

And the other is an essay by Milton Friedman about How to Cure Health Care. What's really interesting in this one is how he talks about the origins of employer provided health care, and what the effects of that development were:

 The revival of the company store for medicine has less to do with logic than pure chance. It is a wonderful example of how one bad government policy leads to another. During World War II, the government financed much wartime spending by printing money while, at the same time, imposing wage and price controls. The resulting repressed inflation produced shortages of many goods and services, including labor. Firms competing to acquire labor at government-controlled wages started to offer medical care as a fringe benefit. That benefit proved particularly attractive to workers and spread rapidly.

Initially, employers did not report the value of the fringe benefit to the IRS as part of their workers’ wages. It took some time before the IRS realized what was going on. When it did, it issued regulations requiring employers to include the value of medical care as part of reported employees’ wages. By this time, workers had become accustomed to the tax exemption of that particular fringe benefit and made a big fuss. Congress responded by legislating that medical care provided by employers should be tax-exempt.

The tax exemption of employer-provided medical care has two different effects, both of which raise health costs. First, it leads employees to rely on their employer, rather than themselves, to make arrangements for medical care. Yet employees are likely to do a better job of monitoring medical care providers—because it is in their own interest—than is the employer or the insurance company or companies designated by the employer. Second, it leads employees to take a larger fraction of their total remuneration in the form of medical care than they would if spending on medical care had the same tax status as other expenditures.

Employer financing of medical care has also caused the term insurance to acquire a rather different meaning in medicine than in most other contexts. We generally rely on insurance to protect us against events that are highly unlikely to occur but that involve large losses if they do occur—major catastrophes, not minor, regularly recurring expenses. We insure our houses against loss from fire, not against the cost of having to cut the lawn. We insure our cars against liability to others or major damage, not against having to pay for gasoline. Yet in medicine, it has become common to rely on insurance to pay for regular medical examinations and often for prescriptions.

If the tax exemption for employer-provided medical care and Medicare and Medicaid had never been enacted, the insurance market for medical care would probably have developed as other insurance markets have. The typical form of medical insurance would have been catastrophic insurance (i.e., insurance with a very high deductible)."

Just interesting, I thought. It's a common point in economics that Friedman makes in this article. Nobody is more conscious of how your money is spent than you are, so when that power is given to a third party, they are much more frivolous with those expenses than you would ever be.

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