About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

14 Cato J. 135 (1994-1995)
Buy Health, Not Health Care

handle is hein.journals/catoj14 and id is 137 raw text is: COMMUNICATIONS Buy HEALTH, NOT HEALTH CARE Robin Hanson U.S. per-capita spending on health care is at an unprecedented high. Fear that something is terribly wrong with our health care system is widespread, and proposals to nationalize the industry are even taken seriously. Perhaps some simple change will do the trick, like relying less on insurance and employers as middlemen. But if we are willing to consider radical change, let me offer a different suggestion. We are buying the wrong thing. What we want is health, i.e., a long healthy life, but when we sit down and draw up a contract, what we buy is health care, i.e., a certain degree of attention from health care specialists. Of course there is some relation between the two-a concerned health specialist can help us improve our health. But there is also a difference-when we reward our advisers just for giving advice, do they try hard enough to give the best advice they can find for a low price? Or are they satisfied to give costly mediocre advice that is also comforting, authoritative, and requires their further services? In theory we have a variety of institutional mechanisms to deal with this so-called agency problem. Strong legally backed professions raise prices, but supposedly avoid quacks. Malpractice law and internal professional review punish advisers from drifting too far from local standard practice. However, current legal practice is biased toward advising more expensive care, and all this may do too little to encourage the evolution of a better standard practice. For patients with long-term contracts, Health Maintenance Organi- zations (HMOs) have an incentive to invest now to prevent future symptoms, at least when standard practice requires attending to those Cato Journal, Vol. 14, No. 1 (Spring/Summer 1994). Copyright @ Cato Institute. All rights reserved. The author is a graduate student in social sciences at California Institute of Technology. 135

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most