Deductive Reasoning

Among the most interesting, if heinous, ideas of the 1% is that healthcare is just another consumption good, and if "we" make it more expensive, then people will spend less on healthcare. And the rich will get richer, of course. The notion, of course, is nonsense. Only the 1% could ever afford tummy tucks and silicone boobs and such. The rest of us only seek healthcare when something bad happens. There have been studies (you can find them, if you're interested) which find that preventative healthcare makes no difference to overall health of a population. That should be obvious: how many health problems do you know of that show up in an annual (or biannual) physical? Vanishingly few.

One of the core ideas of the save-money-by-making-healthcare-expensive is high deductible plans. Again, the notion that such plans are both less expensive and offer better health is grounded in the notion that the 99% are visiting doctors like corner ice cream shops. Of course not. Sure, there are a few hypochondriacs, but the gross effect is to deny vital healthcare when it's a matter of life or mortality/morbidity.

Today is a report on a study bringing some data to the issue. I expect you'll find it illuminating.

The hospital offering the $3,000 M.R.I. might lose enough business that it will lower its price.

I picked that particular sentence, since The Tyranny of Average Cost™ is generally couched in terms of what happens to the price of MRI scans if far fewer are done. The notion that MRI scans are highly price elastic makes no sense: the cost is almost entirely amortization of the machinery. There's not much else to pay for. Fewer MRIs at $3,000 mean that the MRI scan now costs $4,000 or $5,000, depending on how many are removed from the accounting.

Anyway, a large, unnamed company instituted a high deductible plan, and was followed by some academic researchers.

Amitabh Chandra, an economist at Harvard, and one of the researchers, said he was convinced the study would prove the value of deductibles, at least for well-off and well-educated workers.

He was wrong.
...
Mr. Chandra said he was no longer convinced that deductibles turned patients into good consumers. "The best case was the theoretical case," he said. "I was all for high-deductible plans before I wrote my paper."

And, of course, the punchline is stated explicitly:

"There's essentially nothing they can do to prevent the likelihood they'll have high-cost health events," [Dr. Peter B. Bach] said.

Well, just die early. Which is the whole point, of course.