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spencer


Let me see if I understand this.

Your solution for health care being too expensive is to make it more expensive.

Only an academic economist come come up with such a solution.

Tom Dougherty

By shielding the patient from the true cost of health care, patients will over-consume health care driving up costs. If one goes to a restaurant and has to pay the full bill, he might order a burger, fries, and a coke. However, if I tell him he will only have to pay 10% of the bill and I will pick up the balance, guess what, he will probably order a shrimp cocktail, Caesar salad, filet mignon, and a bottle of wine.

spencer

If I go to a restaurant it is voluntary.

But if I go to the hospital it is because I have to, not because I want to.

Your analogy makes no sense.

Phil

Spencer,

I expected you would misunderstand Tom's analogy and would not see the fallacy of composition within your own critique. I am not disappointed in either respect.

sadastronaut.wordpress.com

Spencer,
I admit the point of the post is not completely intuitive, but it does make sense. When people don't have to pay for things themselves, they will consume more. More consumption equals more cost. Because of the nature of health care, everyone shares increasing costs.

If I may attempt an analogy, it is like heating costs of a person who owns a small condo and pays their own heating bills vs. someone who rents an apartment and utilities are covered. Which space is going to consume more heat and have higher heating bills? It will be the renter because they don't pay for it. The only thing is that average utility cost is factored into the rent bill, and this is adjusted over time, so the renter will eventually pay for it, whether or not they use a lot of heat or not.

sadastronaut.wordpress.com

Another way to look at it is this. Let's say companies stop paying for health insurance premiums, so now the employee pays 100%. You look at 100% and say, "wait a minute, that's more than 10% or 50% or whatever". But there's more. Phil's theory, and a reasonable one based on some theory called supply and demand, is that due to a decrease in demand overall premium prices are lower, so you will still be paying a much lower cost.

Phil

The first apartment I got had the electricity paid for for the first few months. It was January that first month and I cranked the heat up to 80. Once I started paying, I kept it around 70.

sadastronaut.wordpress.com

I always promised myself I wouldn't be like my dad, always watching the thermostat making sure it never got above 70. How quickly things change.

Phil

Like they say, people respond to incentives.

mobil bekas

"When people don't have to pay for things themselves, they will consume more. More consumption equals more cost. Because of the nature of health care, everyone shares increasing costs", you re absolutely right, I agree with that opinion

Catrina

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