More Medicine

David Cutler strikes back with an observation that’s a necessary complement to Robin Hanson’s post about how much medicine is wasteful, namely that the waste-factor moves in both directions.

Much of the money that people spend on medical treatment isn’t especially useful, but policies (cost-sharing, etc.) aimed at inducing people to cut back on their consumption of health care don’t specifically induce them to cut back on their consumption of the wasteful parts. Thus, it’s not as if the uninsured or the underinsured are skimping on wasteful treatments and still getting the necessary stuff, while those of us who are better positioned are just getting waste. Instead, the uninsured get little health care and much of the health care they do get is wasteful. People under financial pressure to reduce health care expenditures tend to cut out useful things just as much as the useless ones.