By John F. Hunt
Originally posted December 21, 2013
If you learn nothing else today, I would ask you to learn that moral hazard is the cause of medical price hyperinflation.
Moral hazard is not just two words that don’t seem to go together. Moral hazard is when the person who bears the economic burden of a decision is not the decision maker. In the health care setting, moral hazard is when the third party payer (insurance/government) bears the economic consequences of a patient’s decision.
The cheapest form of health care is to let sick people die. And the government will always need to save money on health care so they can afford to send soldiers to foreign lands that have oil, subsidize big agribusiness to grow corn to make ethanol to destroy our engines, give huge grants to bankrupt companies whose executives support Obama, double the size of the NSA’s Utah data center, or bail out a few more Wall Street looters.
Remember that health insurance – because of its inherent moral hazard — is the problem, not the solution.
The entire article is here.
Thanks to Ed Zuckerman for this blog post.