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Your Take: On the Healthcare Law

Posted By Jim On 03/30/2012 @ 7:15 am In Your Take | 79 Comments

Earlier this week, the Supreme Court heard oral arguments over the healthcare law [3] over the course of three days. It’s been the subject of debate all over the news and it’s something that even my lovely wife has asked me about. This Your Take is going to be exceptionally long, I hope you read most of it and I really hope you share your thoughts. Unlike the vast majority of the comments on the Internet, I know that when it comes to thoughtful insight, you guys have enlightening me more than the other way around.

Before I get into what I think, I want to introduce the idea of the tragedy of the commons [4], because it plays an integral role in how I think of health care. If you have several herders sharing a common piece of land, where each herder is allowed to let their cows graze there, and each herder has an incentive to keep the pasture in good condition. If everyone starts with five cows and they agree to share the land, the grass can grow back and the pasture is kept in good condition. Then someone gets a new cow, lets it graze in the fields, then someone else gets a new cow, and it too grazes. They know they originally agreed to share the land but now two of the owners are getting a little bit more than the rest and the pasture suffers from overgrazing.

How does health care look like the tragedy of the commons? Healthcare is the pasture and everyone is a herder with one cow. Except some of the herders say they don’t want their cow to graze in the pasture, they have other pastures to graze on so they don’t pay to maintain the field. Then disaster strikes, a flood destroys their other pastures and they now need to use the common one. The problem here is that the other herders can’t stop the new herders from using the land and they pay for the addition upkeep because the pasture’s maintenance staff increases prices to help pay for the added demand for grass.

I think the individual mandate forces those herders who don’t want to pay for the upkeep of the communal pasture to pay. They may not need it today, but they will need it one day.

Let’s depart from the analogy and talk about health care specifically – I believe that health care is something all Americans should be able to access. I also believe that healthcare is expensive because our the economic incentives are built in such a way that you want to maximize procedures to maximize profits. Preventative care is cheaper than prescriptive care, so medical companies want more prescriptive care because it’s makes more money. What’s more profitable, a cholesterol drug (best selling drug ever is Lipitor) that someone has to take for the rest of their life or preventative care through healthy eating, exercise, and other mechanisms? So I like that the healthcare law did something to address preventative care, though it’s still limited.

As for the mandate and the argument that it’s the government overstepping its authority by forcing people to buy something – I agree. I also think this is an exception. When we pay for Medicare and Social Security, aren’t we being forced to buy something? I don’t know the legal arguments but I know that those payroll deductions are non-elective and mandated by the government. Health care should be the same.

Finally, on this point of healthcare overall… the problem with health care isn’t that people are uninsured, it’s that you can’t, morally or legally, stop someone from receiving treatment if they need it. If the herders didn’t have to pay for fields they didn’t need and were willing to let their cows die, then we shouldn’t require them to pay. But they won’t let their cows die, nor should we be a nation in which we let them even make that decision, so the individual mandate to pay for the pasture is necessary.

What do you think?


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[3] heard oral arguments over the healthcare law: http://www.cnn.com/2012/03/28/politics/scotus-health-care/index.html

[4] tragedy of the commons: http://en.wikipedia.org/wiki/Tragedy_of_the_commons

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