Should-Read: Antonio Fatas: On Twitter: “Healthcare is complicated”

Should-Read: Antonio Fatas seems annoyed with Greg Mankiw. I think I understand where Antonio is coming from: one has a moral obligation, I think, not just to say “health care is a complicated issue”, but to go on and say what kinds of “regulatory relief” and what kind of “expanded government role” you believe would do more good than harm—and also (we are still looking at you, Marty) not to misreport and misconstrue the solid empirical literature, and also (here we are looking at you, Greg) to say more than that the issues are “hotly debated”:

Antonio Fatas: On Twitter: “Healthcare is complicated but Greg Mankiw should criticize policy proposals that are incoherent or just lie about their benefits…” https://twitter.com/AntonioFatas/status/890979381719511044

Greg Mankiw: Why Health Care Policy Is So Hard: “‘Nobody knew that health care could be so complicated’. President Trump said that in February… https://www.nytimes.com/2017/07/28/upshot/why-health-care-policy-is-so-hard.html

…Anyone who has spent some time thinking about the issue sees its complexity. With the collapse of the Senate health care bills this week, the president has certainly been reminded of it. But Mr. Trump’s epiphany raises some questions: Why is health care so complicated? How does it differ from most of the other goods and services that the economy produces? What makes health policy so vexing?…

The magic of the free market sometimes fails us when it comes to health care. There are several reasons. Externalities abound… vaccines, for instance… medical research…. Consumers often don’t know what they need… and sometimes are not in a position to make good decisions…. Health insurance… means that consumers no longer pay for most of their health care out of pocket…. Insured consumers tend to overconsume…. To mitigate this problem, insurers have co-pays, deductibles and rules limiting access to services. But co-pays and deductibles reduce the ability of insurance to pool risk, and access rules can create conflicts between insurers and their customers. Insurance markets suffer from adverse selection… the death spiral… the insurance market may disappear….

The best way to navigate the problems of the health care marketplace is hotly debated. The political left wants a stronger government role, and the political right wants regulation to be less heavy-handed. But policy wonks of all stripes can agree that health policy is, and will always be, complicated.