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Consumers Like Buying Health Care Services

By Matthew Yglesias on April 29, 2011 at 12:14 pm

"Consumers Like Buying Health Care Services"

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This chart from the Kaiser Family Foundation shows us what’s wrong with the idea that a more consumer-oriented health care system will reduce health care spending:

What you’re seeing here is that total spending is highest in countries like the United States and Switzerland that have a relatively large private sector role in health care and lowest in countries like the United Kingdom with super-statist systems. It would be a bit perverse to say that all the laws of economics are upended and what this shows is that market-driven, consumer-oriented systems “don’t work.” We should, instead, consider taking this data at face value and concluding that consumers like to consume health care services.

If you read an account of African cancer patients spending scarce money on useless traditional healers, it’s easy to get condescending about their lack of scientific sophistication. But, really, how much medical science to any of us really know? The traditional healers can’t cure disease, but they sure can offer hope and going to them and spending money on their services gives people a sense of hope and agency. Getting a memo from NICE about how there’s actually nothing reasonable that can be done for you is a huge downer. In a more entrepreneurial system, people respond to this failure by getting better at peddling the false hopes that people demand.

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