Monday, August 29, 2005

MORAL HAZARD
Mickey Kaus rounds up a couple of articles aiming to debunk the "moral hazard" theory of medical insurance -- that a lot of medical insurance increases the consumption of medical care to inefficent levels.

One thing unaddressed by either article, or Kaus, is how the moral hazard theory might apply to risky behavioral patterns -- smoking, obesity, hazardous jobs, etc.

One theory is that a lot of medical insurance would lead to an increase in these behaviors. If I am not expected to bear the medical cost for a few extra chesseburgers or a smoking habit, one would expect more of it -- more obesity, more smoking. (This would be hard to isolate, though. Someone with no insurance would see the doctor less often, and thus may not be advised to quit smoking or lose weight).

On the other hand, if society is bearing the health care costs of risky behaviors, then we would also expect more social pressure against those behaviors. If I'm going to be expected to pay for your heart surgery, than your smoking habit is my business in a way that is isn't if I'm not. I'm not sure how strong this force would be, but I wonder (without evidence) if this contributes to the higher rate of obesity in the US than in Canada or European nations.
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