Half the Country Can’t Afford Health Care??

by Don Boudreaux on November 30, 2004

in Health

Understanding “the margin” – realizing that our choices are seldom “all-or-nothing”; they’re usually “a little-bit-more or a little-bit less” – is vital.  (My buddy, the preeminent economic historian Bob Higgs, reminds me that some things are indeed all-or-nothing – for example, a woman is either pregnant or not.)

I was prompted to ponder the importance of the margin when I read Thomas Friedman’s Thanksgiving Day column in the New York Times.  I plead guilty to being unusually sensitive to muddled claims such as this by Friedman: “half the country can’t afford health care.”

This statement sounds sensible – that is, it sounds as if it makes a meaningful claim – a claim that might be correct or incorrect, but nevertheless meaningful.  But it’s meaningless.  It’s muddled from top to bottom, from beginning to end, through and through, and irredeemably.  It’s so muddled that it is as empty of meaning as a stone is empty of passion.

Friedman asserts (as if it’s a fact obvious to all) that “half the country can’t afford health care.”

First ask: Can half of the people in the U.S. afford items such as Band-Aids, hydrogen peroxide, aspirin, daily vitamins, NyQuil, Tinactin, Preparation-H, condoms, and toothpaste?  Sure thing.  These products are health-care products.

Now ask: Can half of the people in the U.S. afford a daily check-up by a personal and dedicated staff of world-renowned physicians using nothing but the latest and best medical techniques and, if and when any problem is detected, no matter how minor, to fly to the finest hospital in the world for treatment of the ailment, stay in a private room, and obtain round-the-clock observation by the best physicians and nurses in the world?  Surely not.  (Incidentally, you might think that Bill Gates can afford such medical care.  I’m pretty sure that he can’t.  The reason is that the opportunity cost of Gates’s time is extraordinarily high.  While he certainly has enough money to pay the world’s finest physicians to live near his home and to give him daily exams, the time cost to him of taking such exams is likely prohibitive.)

Obviously, there’s vast territory between these two extremes.  Going to see a General Practitioner when your cold won’t go away, or going to the hospital emergency room when your child breaks her arm are in this vast territory.  Can half the country not afford such things?  What about appendectomies, tonsillectomies, vasectomies, and gall-bladder removals?  What about prescription drugs such as Allegra, Nexium, and various birth-control pills?  What about hospital stays for mothers giving birth?  What about heart-bypass surgery?  Heart transplants?

It’s undoubtedly true that as you travel the spectrum of health-care opportunities – from over-the-counter heartburn pills all the way to heart-transplant surgery and even beyond – you’ll reach some point of medical care beyond which the care is not affordable by half the people in the country.

Where is that point?  I don’t know.  Nor does Thomas Friedman know, even though he writes as if he does.

But I do have a guess: this point is well beyond routine visits to the family physician and routine prescription drugs.

And be aware that even the concept of “affordability” is ambiguous.  Can a household whose annual income is below the median but who enjoy a level of equity in their home of, say, $75,000 not afford a surgical procedure that costs $25,000 and that isn’t covered by insurance?

Health-care and health-care affordability are not all-or-nothing phenomena.  Writing about them as if they are only feeds confusion.

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