Saturday, July 3, 2010

Moral Hazard...Just a little bit.

Written on 3 July 2010.

     This was a Facebook post that a friend of mine posted. Although this would make for a lively in person debate, this is not possible. However, I felt my thoughts on it deserved more than a quick reply. And, since I was not able to actively participate in the ongoing discussion at that time, this is my humble reply.

     “Americans who appose governmental control always make the claim that they prefer social responsibility instead, case in point the growing crisis of obesity. In principle that sounds great, assuming that people are inherently responsible. However, people are not, and they will always take the path of least resistance. So what should the government do? Watch as society leaps to its demise and do nothing?” –M

     M. What we have here are two questions that are up for debate. One is the question of how much government is too much government and the second is how much responsibility is given to the individual. You and I have had debates about the former, so I wan to address the later. As a social liberal, I feel that you can do whatever you want as long as it doesn’t affect anyone else or affect the collective good of society.

          Having said that, I believe, in our current society, that people don’t realize the TRUE COST of a thing. It is funny that you mention obesity because a fellow student and I used this example in an argument. If you get fat on your own accord, we in a society are encouraged/forced to accommodate you. Granted, there are some people that are obese for medically valid reasons. However, in a majority of cases, people are obese because of lifestyle choice. Now, for some that fall in the lifestyle choice category, they make these decisions without the full benefit of knowledge or education. For others, they willfully do it to themselves. For others, they simply don’t have a choice (i.e. poverty makes them choose cheap, unhealthy food over more expensive healthy food). I would like to exclude this third group for a moment and address the first two.

     Follow me here. I promise there is a point.

     Let’s frame this argument in the realm of Universal Healthcare. For the sake of argument, let’s assume everyone is entitled to the same basic amount. Two checkups a year, free emergency care and free primary care. Now, we tell everyone, “If you get sick, we will take care of you. If you have an emergency, we have you covered. Your basic care will be taken care of, cost free. But anything that you do to yourself, you have to pay for, full cost, unless you have supplemental private insurance.” Who wouldn’t want a chance at that? You go to the doctor and the doctor tells you, “You are 20 pounds overweight. You need to change your diet, drop twenty pounds in the next three months or you will be paying a fee/penalty for every visit.” Would you do it? What if this free care included lifestyle help? Classes that would help you make better choices? Even surgeries if you are obese? We have now eliminated the uneducated, because now EVERYONE has access to the same info. This only leaves us with those who willfully make a lifestyle choice. So that person goes back to the doctor, and says, “Hey Doc, I didn’t lose the weight and now I have complications. Can you help me?” Then the doctor helps them, but at the TRUE COST of the decision (i.e. the costs of pills, treatment etc., that can easily go into the thousands). Those tow problems solved, without grossly invasive government intervention. There are some that say that this doesn’t work. This is untrue because it is already being done in the private sector, without government involvement. This is a good case for moral hazard.

     Now, I want to address the issuse of people knowing better, but not having money to do it. This is where we need government intervention. Those who want to eat better but can’t afford it need the government’s help. We are all aware (I hope) about the dangers of our current food supply situation. However, this is a private business concern. I don’t want to go all Food Nation on you, but until the government intercedes in the broken parts of our food supply, the government should help those who want to help themselves, insetad of subsidizing the obesity of America.

     M. This went a little longer than I anticipated. I welcome your insight into this. Or, if any of your friends read this, I would be interested to see what they see in your feed.