Abstract
The U.S. health care system stands alone among its industrialized counterparts in its high levels of market provision of care. In comparison, more than 70% of health spending among OECD countries is publicly funded, on average. Government provision by the majority of industrialized nations may lie in the particular nature of health, which presents several challenges for run-of-the-mill market provision. Here we examine these challenges from the perspective of the consumer, the insurer, and society. For consumers, government-based healthcare can provide a longer time horizon of coverage fitting to the uncertainty of health outcomes over a lifetime. For insurers, universal public insurance can “close the system” by including both the benefits and the costs of preventive care into the same system. Finally, social norms of fairness and equal access to high-quality care in health care differ from other consumer goods, making market allocation through willingness-to-pay unsatisfactory from a societal standpoint.
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Notes
- 1.
The U.S. Census reported the percentage of the U.S. which was privately insured at 67.3 in 2018 and 68 in 2019 (Keisler-Starkey and Bunch 2020).
- 2.
OECD (2020). Note that not all 38 OECD countries were included in the report.
- 3.
Note this is the approach of the Affordable Care Act (2010) in the U.S. and its model, the Swiss health care system.
- 4.
Currie and Hyson (1999) showed low birthweight children were less likely to pass standardized academic tests. Almond (2006) found lower graduation rates and Field et al. (2009) showed prenatal supplementation increased educational attainment. Currie and Moretti (2007) showed low birthweight decreased the likelihood of living in a wealthy neighborhood and Currie and Hyson (1999) found corresponding correlations with increased unemployment.
- 5.
- 6.
Almond (2006) focused on prenatal exposure to the 1918 Influenza Pandemic, estimating that children of infected mothers were 15% less likely to graduate high school and wages were between 5 and 9% lower. Kelly (2011) found similar effects, though modest, for exposure to the 1957 “Asian flu” in Britain on test scores. In a developing context, Field et al. (2009) show prenatal iodine supplementation in Tanzania raised educational attainment by half a year of schooling.
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Dalton, T.M. (2023). Challenges to Market-Based Healthcare for Consumers, Insurers, and Society. In: Kassens, A.L., Hall, J.C. (eds) Challenges in Classical Liberalism. Palgrave Studies in Classical Liberalism. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-32890-9_11
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