RMI 3501 Chapter 5: Topic 5 Article notes
7 Aug 2016
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The perverse economics of health care and how we can fix it. Health economist john c goodman and gerald musgrave emphasize that health care costs are rising because medical care is cheap for most people, most of what we spend on health care is other people"s money. Buying more expensive food would cause an effect for society that would be substantial increase in the percent of gross domestic product spent of food. The fault for over spending is the system that insulates us from the cost of our decisions. The idea that people spend other people"s money more freely than they spend their own is not a controversial proposition in economics, it applies on all goods. The rand experiment"s main finding: people consume more health care if they"re spending other people"s money. The higher the family"s copayment, the less often members of that family went to a doctor and the less often they incurred medical expenses generally.
