The Geometry of Health Care

"I hope Kronsteen's efforts as Director of Planning will continue to be as successful as his chess."
--Rosa Klebb (From Russia With Love)

This BW cover story hits on one reason why a policy of health care as an entitlement breaks the bank over time. An individual's potential need for health care increases geometrically with age. Couple that with tendencies to make decisions with hope that a treatment will 'beat the odds' and keep a loved one around for at least a little bit longer and you have potent mix of physiological and psychological drivers behind perpetual cost increase.

In free market situations, price is the rationing mechanism. In situations where health care resources are granted as entitlements, rationing can only be achieved by central planners, the so called 'death panels,' who determine how resources are to be rationed.

As with all bureaucratic planning, resource misallocation by health care bureaucrats is certain. There will be inefficient distribution among users. Shortages will arise as some suppliers leave the industry in search of better oppportunities. Innovation will be squelched by the increasing bureaucracy.

And costs will rise.

People certainly should have the right to acquire health care resources. But if people are granted capacity to acquire health care resources at others' expense, then we are more likely to collectively achieve poverty than surplus over time.