Health Care Reform and WITTs and YOYOs

March 31st, 2012 at 3:13 am

Re the SCOTUS’s review of the health care reform case this week:

We don’t know where they’ll come out, and speaking of health care, it’s not healthy to be wringing hands and rending garments until their decision comes out in June.  I suppose until then we can comfort ourselves with smart analyses like this one from health economist David Cutler.  I noted the court’s confusion re externalities here, and Cutler expands on that and other examples of how poorly some of the justices appeared to understand the critical differences between health care and other product markets.

To his credit, Cutler breaks this down to WITTs v YOYOs*:

Follow this logic, and the destination is clear: we are not a society, but a collection of individuals. Don’t tell insurers to pool the healthy and sick; that is too dicey. Don’t worry about uncompensated care; it’s our constitutionally given right to pass on our costs to others.

There’s also an international dimension to all this.  While recognizing that markets and laws are not the same across advanced economies, is it not at all relevant that every other advanced economy a) achieves comparable if not better health outcomes to ours and spends much less, and b) has either mandates, pooling, or regulations that perform similar functions (see here for overview)?  I’m all for US exceptionalism, but common sense would dictate that such a sentiment is less inviting when the outcome is waste of resources and millions of uninsured.

*We’re-in-this-together vs. You’re-on-your-own.

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4 comments in reply to "Health Care Reform and WITTs and YOYOs"

  1. Seth says:

    “… such a sentiment is less inviting when the outcome is waste of resources and millions of uninsured”

    Less inviting to whom? One man’s ‘waste of resources’ is another man’s ‘healthy profit margins’ and ‘large salary, ample bonus and lavish stock options award’.

    Guess which one has political power in these United States?

  2. Robert says:

    With regard to the “mandate” included in the Affordable Care Act (“ACA”), I find it interesting that some of the questioning by some Justices (e.g., what does broccoli have to do with anything?) failed to grasp what I believe to be the most important dimension of the mandate provision. In my view here’s the main issue — because of the social contract we have embraced as a nation from our founding to support the general welfare of our country’s population, we now fail in our societal contract with each other if we allow a minority of our citizens (i.e., those choosing to forego maintaining health insurance for themselves and their families) to impose their economic burden upon all other U.S. citizens when they need health care and can’t afford it. And yes, in the process, this same minority affects interstate commerce — for which the U.S Congress has ample powers under the Constitution and prior Supreme Court decisions to enact legislation such as the ACA.

  3. save_the_rustbelt says:

    It is not the function of the Supreme Court to practice economics, to realign us with other developed nations or to add a “nice things” clause to the Constitution (as in “if it is a nice thing it must be constitutional”).

    Competent legislators may do so within the bounds of the Constitution, but it is not the function of the Court.

  4. Michael says:

    I dream of a world where conservatives would be content with leaving me alone. In reality, they want me to die in a ditch while they watch and place bets on the moment of my passing.