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Is moral hazard a problem for those who aren't yet elderly? In reviewing the RAND data, Gruber cautioned it had certain limitations. It tracked people for only three to five years, which might not be sufficient, especially for children. Also, insurers' rules on out-of-pocket spending were much more generous in the 1970s than they are today. Finally, medical advances during the past 30 years have increased the likelihood that a visit to the doctor will improve your health. Certainly, the statistics don't suggest that healthy people are hogging health-care resources today. Economist Paul Krugman calls it the "80-20 rule." Eighty percent of all health expenditures are spent on 20 percent of the population. It's sick people who run up America's doctor bills, not medical groupies.
At least some doctor visits can be judged unnecessary only in hindsight. Writing in The New Yorker ("The Moral-Hazard Myth"), Malcolm Gladwell—a onetime opponent of universal health care who later changed his mind—observed in 2005:
I just went to the dermatologist to get moles checked for skin cancer. If I had had to pay a hundred per cent, or even fifty per cent, of the cost of the visit, I might not have gone. Would that have been a wise decision? I have no idea. But if one of those moles really is cancerous, that simple, inexpensive visit could save the health-care system tens of thousands of dollars (not to mention saving me a great deal of heartbreak).
A different kind of moral hazard may exist based on lifestyle. A study released last summer found that people who had health insurance were more likely to gain weight than people who lacked it. The authors, from Stanford, RAND, and University College London, found that health insurance increased body mass index by 1.3 to 2.1 points. I'm a bit skeptical, partly because access to health care doesn't do all that much to undo the poor health effects of obesity. But I can easily imagine that access to anti-cholesterol * drugs like Lipitor might increase consumption of unhealthy foods that would otherwise send the eater's cholesterol into the stratosphere. To the small extent the health reform would affect problems like these, however, it would be to reduce such abuses by encouraging private employers to discount health insurance premiums for people who follow healthy lifestyles.
For the most part, it isn't patients who are gaming the system. Writing in Slatein 2005, Austan Goolsbee, now a member of the White House Council of Economic Advisers, observed, "The moral-hazard problem is more and more about corporations rather than individuals." One factor is what three physicians, writing in the New York Times in 2007, termed "an epidemic of diagnoses." Doctors and hospitals are the true gatekeepers of health care, and they have a strong financial interest to increase the number of procedures performed. Patients typically lack sufficient knowledge to second-guess their judgments. Health care costs are out of control, and the health-reform bill would do almost nothing to bring them in line. But increasing the federal government's financial stake in these costs at least offers some hope that it will someday use its muscle to bring the health care industry to heel. Who else has the clout? If you're worried about health care and moral hazard, it makes more sense to support health reform than to oppose it.
E-mail Timothy Noah at email@example.com.