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October 30, 2007
Healthy Huber

Peter Huber with a long and typically brilliant article explaining why the new medicine makes socialized health care impossible. Excerpt:

Insurance makes sense for risks that people can't control. Or to put it more bluntly, socialized medicine was a smart idea back when medicine was too stupid to halt infectious epidemics, discourage suicidal lifestyles, or discern the perils in killer genes.....

But we're now past the days when infectious diseases were the dominant killers, and heart attacks and lung cancer seemed to strike as randomly as germs. And insurance looks altogether different when your neighbor's problem is a persistent failure to take care of himself. Many people willing to share the burden of bad luck eventually tire of sharing the cost of bad behavior.

The new medicine certainly hasn't banished luck completely--molecules don't predict car accidents and can't yet cure Huntington's disease, cystic fibrosis, or many rare cancers. A widely shared sense of common decency also impels protection of children and the elderly. In between, however, the unifying interest in health insurance is surely the sense that anyone can be struck out of the blue by a ruinously expensive health catastrophe. And step by relentless step, molecular medicine is taking luck out of the picture.

Now consider what that does to insurance economics. Most critics of the status quo focus on the more manageable of the two core problems that health insurers now face: runaway cost. But the real problem is that for many people, health care is getting cheaper. This is what makes actuaries wake up screaming in the night: disease is coming out of the closet, and the new medicine splits health-care economics in two. For the health conscious, skipping the Cherry Garcia may be difficult, but it's cheap, and Lipitor at almost any price is much cheaper than a heart attack. The health careless skip only the pill, not the ice cream, and end up in desperate need of what helps the least and costs the most. Doctors, hospitals, and scalpels summoned late in the day cost far more, and accomplish far less, than chemistry tuned to the point where there's never plaque to cut.

No one-size, one-price insurance scheme can keep people happy forever on both sides of this ever-widening divide. Aetna can't offer uniform coverage to individuals who face radically different risks, and who know it, too. Governments can't, either.


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