A Must Read on Health Care Policy

Malcolm Gladwell's article in this week's New Yorker is an absolute must read. It's a remarkably insightful piece, a bit wonkish but accessible at the same time. In the article, Gladwell exposes everything that is wrong with the current conservative approach to health care policy. In particular, he makes two incredibly important points.

First, he convincingly puts to rest the utility of "moral hazard" theory in the health care context. I'm not going to attempt to explain what "moral hazard" theory is in this post (I wouldn't do nearly as good a job as Gladwell anyway), but suffice it to say, it's an economic theory that underlies nearly all conservative proposals to improve our health care system, particularly those proposals that involve creating private tax free health care accounts. Gladwell convincingly argues that the very premise underlying such proposals is hopelessly ill-suited to health care policy. His criticism is timely too, because the notion of "moral hazard" has recently infected even liberal policy proposals. A particularly troubling example of this was the cover story from the New Republic a few weeks ago ("The New New Deal"), which enthusiastically endorsed the creation of private health care accounts.

Secondly, Gladwell does a great job of explaining why the recent trend in the insurance industry away from the "social insurance model" and toward the "actuarial model" is troubling.

I realize this sounds like boring stuff, but the article is far more interesting than I'm making it sound. It's definitely worth reading.