Clarifying Our Health Care Options

Published August 1, 2007

Crisis of Abundance–Rethinking How We Pay For Health Care
Arnold Kling
Washington, DC: Cato Press, 2006
110 pages, hardcover, ISBN 1930865899, $16.95

Arnold Kling is a lucid writer and down-to-earth Ph.D. economist from the Massachusetts Institute of Technology. Really.

I was attracted to his book by the title, which describes American health care well–we have it all, we do it all. I am a humble bottom-feeder emergency physician in a busy Army hospital emergency department, and with a stroke of a pen, I can spend thousands of dollars in resources for anyone who comes through the door. How can that compare to the care delivered in Third World countries, or even the mediocrity that we know as welfare-state medicine?

So why is America so anxious about the failure of American health care, so determined and energized about imposing central control and planning on the $2 trillion annual expenditures made by the medical care system? Health care in America is now about 16 percent of the economy, and government already controls and pays for 40 percent of total outlays.

Good Rationale

In eight intense, well-footnoted chapters, Kling rolls through the policy problems, then offers sensible analysis and proposals for solutions. He says a lot in this book, and a few samples will suffice to justify my applause:

  • American medicine is unique in the world in its dependence on, and availability of, technology and specialists.
  • Most medical costs are not about life expectancy–they are about pursuing better quality of life. That doesn’t show up in public health statistics but is the result of economic choices.
  • Private health insurance is the vehicle for positive change, not the problem.
  • Health care provider prices are not the problem; rather, it is how often high-cost services are used.
  • Most recent government proposals for controlling health care costs involve central planning and rationing.
  • The goals of accessibility, affordability, and effectiveness inherently create public policy conflicts.
  • Insurance has limited benefits and must be tailored intelligently.
  • Society’s varying health care needs require intelligent policymaking.

Sound Policy Ideas

Kling concludes with policy ideas born of intelligent analysis and economic expertise. The real-world problem of meeting people’s needs and not compromising Americans’ expectations are subjected to his razor. He suggests consumer-oriented, market-based, rational solutions that deal with the limits and benefits of both public policy and free-market health insurance and health care.

Kling suggests new insurance products that encourage personal initiative and rational risk management, while recognizing the immense impending burden of an aging population. I did not find any of his proposals undesirable or incomprehensible.

Not bad for a professor from MIT. When dealing with those, I usually need a translator by my side. Not this time.

John Dale Dunn ([email protected]) is a member of the Science and Policy Advisory Board of the American Council on Science and Health and teaches emergency medicine at CR Darnall Army Medical Center in Fort Hood, Texas.