More on Central Control and the Acceptance of Death

Following on from yesterday's post on the pervasive acceptance of both aging to death and centralized control over society, here is another item that illustrates how state control of medical services and their funding via taxation distorts ethics in the matter of life and death. It quickly becomes acceptable to talk about structuring countless deaths to reduce costs - the power of perverse incentives at work. In industries not so dominated by the state, growth in customer needs and outlays is a boon, an opportunity for growth to meet the challenge, but where the state runs things it inevitably means rationing: the incentives operate to make us all worse off.

We become inured to this, disturbingly. So you won't find much outrage in response to this sort of thing, and especially not the relevant sort of outrage - that this is what centralized control over medicine and health brings us to, a complete reversal of the eagerness to serve and develop new products that is the characteristic of a free market.

Past successes in reducing smoking have paid off in slower spending growth on associated medical conditions. Has smoking reduction has also slowed the rate of growth in total health care spending? Maybe, but maybe not. [One] component of outlays declines over time due to a healthier population with lower per capita health care costs. However, another component labeled "Effects of greater longevity on outlays" increases over time as smoking-related deaths are averted and more individuals are alive to collect Social Security and consume federally funded health care. After about twelve years, the longevity effect begins to outweigh the per capita spending effect, and federal outlays are actually increased by the reduced prevalence of smoking brought about by the excise tax!

Too bad that not smoking couldn't just keep us healthier without prolonging life! Without this dreaded longevity effect, we could unambiguously claim to be saving money in addition to producing greater health. Seriously though, the narrow question of whether reduced prevalence of smoking saves federal dollars hinges on the number of extended life years. Because some policy-makers will evaluate tobacco control programs on whether they save federal dollars, the delayed-mortality effect of reduced smoking is a negative from this perspective. This perverse result is no knock on the CBO study; it simply answers the question asked and is careful to note that "consequences for the federal budget are only one factor that lawmakers may consider when developing policies to promote health."

Link: http://healthaffairs.org/blog/2013/01/22/the-complex-economics-of-disease-prevention-and-longevity/

Comments

Isn't it reasonably clear that the author is kidding?

Too bad that not smoking couldn't just keep us healthier without prolonging life! Without this dreaded longevity effect, we could unambiguously claim to be saving money in addition to producing greater health. Seriously though, the narrow question of whether reduced prevalence of smoking saves federal dollars hinges on the number of extended life years. [All emphasis mine].

See also this podcast on another case of a cool-headed (if motivated) economic analysis on this question running into a PR disaster for similar reasons.

It's not, in any case, at all clear to me that this has much to do with state control. To the extent that this is a problem, financially, it would be a problem if all health care insurance were private. The costs do have to be borne by someone, and smoking or not will play into what the costs are and who pays them.

In any case, it's a problem with public health and technological solutions: the problem is exactly that nonsmokers live longer, but also spend years suffering a progressive slide into age-related degenerative disease. If people stayed young and healthy indefinitely, the question would be one for economic historians and arguments from analogy.

Posted by: Michael at January 23rd, 2013 10:26 AM

Government healthcare spending encourages people toward all sorts of destructive activities and habits that they would otherwise avoid by negating their monetary cost, either in terms of personal healthcare spending or insurance premiums. Some of the more perceptive defenders of government use this distortion of personal behaviour to argue for special excise taxes against products associated with dangerous activities and habits. Thus the government creates new problems for itself to "solve" and the "solution" is always to increase the power of the state. Of course there is no limitation to be found except that dictated by political expediency, for which cause none of these people would argue for instance that fishermen and miners should pay higher income taxes.

Posted by: José at January 23rd, 2013 10:51 AM

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