Micha Gisser In the Wall Street Journal

Congratulations to the Rio Grande Foundation’s Micha Gisser. His excellent letter to the editor regarding health policy was published yesterday in the Wall Street Journal. Here is a portion:
“The economic problem lies in the fact that traditional medical insurance covers two dissimilar events, catastrophic and minor illnesses. Consumers’ demand for catastrophic medical incidents is inelastic: a consumer will not use more of the heart-surgeon’s services just because his out-of-pocket spending is zero. Consumers’ demand for care for minor illnesses is elastic: it is inversely related to price. At the true high price a consumer would consult the medical encyclopedia and use over-the-counter drugs. At a low price (zero if her insurance pays the entire cost) a person would consume much more freely, mainly by making appointments with her doctor for every sniffle and headache. The problem with the prevailing health insurance is that the third-party payment of health-care bills insulates the consumers from the real costs of medical care services for non-catastrophic incidents.”
For the entire letter, click here (subscription required).
Nice job, Micha!

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