Deinonychus antirrhopus

Errr...What?

Over at Lean Left, Kevin has been blogging about cuts in TennCare. What caught my eye was the following comment on the benefits of TennCare.

TennCare is a good program that has made us all healthier (by getting people care and treatment that they needed before they transfered their problems to the rest of us), helped reign in health care costs (by getting people treatments before the problems escalated), helped the economy (by helping companies who did not have health insurance for their employees to miss less work and maintain their productivity), and provided a much needed safety net to people across this state to protect them form the harshness of the modern economy.

I am going to list Kevin's points here to make it easier on me to address them.

1. TennCare is a good program that has made us all healthier (by getting people care and treatment that they needed before they transfered their problems to the rest of us). I'm not sure I follow this. Transferred the problems how? Contagious/communicable diseases? Okay, sure. Some level of public expenditures on health care can in my veiw be justified on grounds of there being negative externalities. But does it necessarily mean spending billions? For example, Kevin has a quote about a woman who had a heart transplant. Was there anything contagious/communicable there? If not, then this argument of externalities does not work.

2. Helped reign in health care costs (by getting people treatments before the problems escalated). Ahhh, yes this old bromide. "An ounce of prevention is worth a pound of cure." Right, which is why billions are being spent on people going to the hospital. Sounds like the prevention part wasn't on everybody's mind. I have always found this kind of thing very suspicious. For one thing I belong to an HMO and I have to say, when it comes to preventative medicine I give them a great big whopping F. And wasn't this the big money savings that was the basis for forming HMOs to begin with? "We'll manage our patients health and control costs that way."[/end stentorian voice] Seems to me this is the last thing my HMO does. I haven't been in months...maybe over a year. They don't call to get me to come in and get a check up. They are perfectly happy taking my money and not seeing me. For all I know I could have a really costly medical problem building up and they'd be completely blind sided by it. So I don't buy this argument. Sounds nice, but I just don't see it working out the way those who utter this banality imply it will work.

3. Helped the economy (by helping companies who did not have health insurance for their employees to miss less work and maintain their productivity). Uhhh...what? So was it magic money that paid for this program? Is there an endless pit of money in Tennesse that allows them to fund these programs with no taxes, fees, and the like?

4. Provided a much needed safety net to people across this state to protect them form the harshness of the modern economy. Sounds like it is a safety net that is becoming quite expensive to maintain. One of the problems with safety nets are the impact they have in incentives. A badly structured safety net can lead to perverse outcomes. Now I don't know if TennCare has these problems, but these problems are often found in government programs.

Whenever I read these posts about how to set up a bureaucratic health care system I always am reminded of Arnold Kling's notion of sendind people a voucher. A flat out subsidy. If you are poor you get $X in a voucher that you can take to shop around for health insurance that meets your needs. Further, you could structure the voucher so that it always "pays to earn more money". For example, suppose you get a voucher of $2,000 if you make $10,000/year. Now if you get a raise and make $12,000/year we wouldn't want to cut the voucher to $0 since the person might not take the raise. Instead you could cut the voucher to $1,000. The voucher would harness the power of markets in that people would look for the best care for their voucher/out-of-pocket-dollars. If I'm young with a family and we are all healthy we might opt for a health care policy that covers catastrophic care vs. a plan that would cover more mundane medical issues.

Oh well, I don't think we will ever see anything like this. I imagine the current system will keep chugging along till it gets to be too much of mess then we'll end up with some crappy socialized medicine program.