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Bring your genes to Brandeis

Brad DeLong, Brad DeLong | August 31, 2010

I was going to write another post about how increasing genetic knowledge ought to push us toward something like single-payer health care, but Bill Hoffman of the University of Minnesota reminds me that my friend Steve Cecchetti at Brandeis wrote it three years ago–and wrote it better than my draft post.

So I am canning my draft post, and turning the microphone over to Steve Cecchetti of Brandeis:

The inevitable future of health care: Economists believe in markets. Market-determined prices allocate scarce resources efficiently, encouraging individuals to put them to their best possible uses. This improves everyone’s welfare. But there are times when private markets break down, and insurance is one of them.  When markets fail, the government inevitably has to step in and provide insurance.  That’s the case with deposit insurance as well as with insurance against the devastation from natural disasters.

 The future is one in which health care will fall into this same category.  Even in countries like the United States, the government, not the market, will ultimately control the level and cost of the medical care we will receive. A single-payer, publicly run, health-care system is the inevitable consequence of the nearly continuous scientific revolution in molecular genetics that began a half century ago.  One day it is James Watson, one of the discoverers of the structure of DNA, being handed the complete genetic code inside his own cells.  The next day, researchers tie yet another chronic disease to the presence of specific patterns on individual chromosomes.  And then, a few days after that, we learn that scientists are learning to make stem cells from skin cells. The time is fast approaching when we will have an inexpensive test that is capable of revealing a person’s genetic propensity to contract a broad array of chronic diseases.  That means that we will be able to accurately assess the cost of medical treatment over their lifetime….

I am not anxious to learn about my genetic predisposition to develop Alzheimer’s disease or my propensity to contract heart disease or type 2 diabetes…. [But there will be] the medical equivalent of my credit score – call this my “health score”… [to] summarise my overall health-care risks…. The fact that we will all have health scores has profound implications for… the failure of market-based insurance…. [When] private insurers can accurately compute customer premiums to reflect expected future payouts… insurance market will break down. Insurance is about shifting risk….  When either the insurer or the insured can forecast… and accurately distinguish… insurance disappears….

When it comes to housing, cars, vacations, and the like, we are fairly tolerant of disparities between rich and poor.  Our focus is on equal opportunities, not equal outcomes…. Not so for health care.  Members of wealthy societies share the view that their members are entitled to high-quality medical care.  Social justice demands that the rich and poor among all of us receive roughly comparable treatment…. [T]echnology will force private health insurance to disappear at the same time that the social pressure to provide equal access to care will remain. This makes it inevitable that health care systems everywhere will provide universal coverage and be publicly run.  Governments will replace markets, insuring that the poor and uninsurable receive medical treatment at the same time that the healthy are forced to participate in a comprehensive system…. I’m off to my wine cellar to ponder the best way to design a publicly run, single-payer health care system.

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