Health Insurance and Moral-Hazard

Don’t miss Malcolm Gladwell’s latest New Yorker article, “The Moral-Hazard Myth: The bad idea behind our failed health-care system.”

The subject is a tangled one, and Gladwell does a good job of outlining the economic and philosophical reasons for our health care system’s sorry state. Though I find this passage a bit reductive:

People without health insurance have bad teeth because, if you’re paying for everything out of your own pocket, going to the dentist for a checkup seems like a luxury. It isn’t, of course. The loss of teeth makes eating fresh fruits and vegetables difficult, and a diet heavy in soft, processed foods exacerbates more serious health problems, like diabetes. The pain of tooth decay leads many people to use alcohol as a salve. And those struggling to get ahead in the job market quickly find that the unsightliness of bad teeth, and the self-consciousness that results, can become a major barrier. If your teeth are bad, you’re not going to get a job as a receptionist, say, or a cashier. You’re going to be put in the back somewhere, far from the public eye.

Is it really that simple?

Also, Gladwell plainly dismisses the idea of moral hazard — he says people don’t make needless trips to the doctor when they’ve got health insurance, which is one of the arguments made by opponents of universal health care.

I have this observation, though, after living in Taiwan, a country with universal care: people there go to the doctor a lot (at least compared to Americans). As in, whenever they have a cold or cough or the most minor of ailments.* Of course, as Gladwell also says, people going to the doctor a lot isn’t necessarily a bad thing: when people seek medical care more often, they tend to nip niggling ailments in the bud before they become more serious — and this saves health care system funds in the long-term.

*The Taiwanese affection for health care services might stem from reasons other than moral hazard (or lack thereof). For example, I wonder if the Chinese belief in traditional medicines (like accupuncture and herbal remedies) used to treat everyday aches and pains may translate to more frequent use of Westernized medical treatment.

UPDATE: Zimran Ahmed has some interesting commentary on Gladwell’s article over at Winterspeak. And the fine folks at MargRev are also discussing the piece.

health, health+care, insurance, Malcolm+Gladwell, New+Yorker

Leave a Reply

Your email address will not be published. Required fields are marked *