Saturday, August 8, 2009

Health Care : Market Solutions

Greg Mankiw mentions on his blog an interesting paper by Jeffrey Flier, dean of the Harvard Medical School, on the market solutions to providing health care, all the more interesting since it was published in 1994, here (be patient, it is very slow-loading).

All the current problems have been debated for a long time. See for instance the book I edited in 1990, Comparative Health Systems in Ten Industrial Countries (JAI Press), and (in French) my recent paper “Comment Gagner Plus?” Commentaire, Printemps 2009).

I maintain that most of the alleged "excessive cost" problem of health care comes from the tax financing of health care spending in socialized medecine systems – a tax on labor that hinders economic growth - and not from a somewhat “excessive” level of consumption, that no one can define except the consumers themselves.

Minimize the tax financing by limiting its use to a policy of subsidizing private buying of health care insurance for low income houselholds, and the problem will disappear.

Flier shows convincingly that all the current objections to market solutions do not resist a serious evaluation.

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