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Tag: Money price of care

How We Ration Care

There are not very many good things you can say about a deep recession. But from a researcher’s point of view, there is one silver lining. This recession has given us a natural experiment in health economics — and the results are stunning.

But, first things first. Here is the conventional wisdom in health policy:

  • In the United States, we ration health care by price, whereas other developed countries rely on waiting and other non-price rationing mechanisms.
  • The U.S. method is especially unfair to low-income families, who lack the ability to pay for the care they need.
  • Because of this unfairness, there is vast inequality of access to care in the U.S.
  • ObamaCare will be a boon to low-income families — especially the uninsured — because it will lower price barriers to care.

As it turns out, the conventional wisdom is completely wrong. Here is the alternative vision, loyal readers have consistently found at this blog:

  • The major barrier to care for low-income families is the same in the U.S. as it is throughout the developed world: the time price of care and other non-price rationing mechanisms are far more important than the money price of care.
  • The U.S. system is actually more egalitarian than the systems of many other developed countries, with the uninsured in the U.S., for example, getting more preventive care than the insured in Canada.
  • The burdens of non-price rationing rise as income falls, with the lowest-income families facing the longest waiting times and the largest bureaucratic obstacles to care.
  • ObamaCare, by lowering the money price of care for almost everybody while doing nothing to change supply, will intensify non-price rationing and may actually make access to care more difficult for those with the least financial resources.

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