Categories:
Economics of Health Care
What is this Hansonian view of medicine that you hear me talk about? Robin Hanson explains.
The bottom line is that thousands of people randomly given free medicine in the late 1970s consumed 30-40% more medical services, paid one more “restricted activity day” per year to deal with the medical system, but were not noticeably healthier! So unless the marginal value of medicine has changed in the last thirty years, if you would not pay for medicine out of your own pocket, then don’t bother to go when others offer to pay; on average such medicine is as likely to hurt as to help.
Read the whole thing.
READER COMMENTS
jp
May 8 2007 at 8:27am
Hanson makes an excellent point. However, his test (“if you would not pay for it out of your own pocket . . .”) is not really practical at present (assuming he meant it to be). Tax incentives and other government interference in the medical-services market have bid up the price of healthcare so much that the current out-of-pocket price for care is meaningless as a standard.
Chuck
May 8 2007 at 8:51am
I don’t think that’s quite what they conclude.
Here’s a paper written by two profs from U. of Chicago that summarizes the RAND study and many other studies as well.
A few quotes:
Chuck
May 8 2007 at 8:52am
The link to the paper isn’t very clear, so I thought I’d post it explicitly…
http://www.umich.edu/%7Eeriu/pdf/wp6.pdf
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