Armey and the “Healthy” Debate

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I’d like to join in thanking Dick Armey for entering Swampland this week. He may remember that I spent some time covering him, Newt Gingrich and the rest of the GOP leadership that took over the House after the 1994 mid-term elections. I wrote one story in 1997 I doubt he liked much, after the failed coup attempt against Gingrich. A year earlier, I wrote a piece about him that took me down to his north Dallas district. What I remember from the trip is that Armey was extremely skeptical of me, and of the media in general. He wouldn’t let me come along when he went bass fishing, his favorite pastime (As Karen recalls, Armey’s screensaver in his House office was a photo of him kissing a large-mouth bass he’d just caught). And he made a point of not letting his staffer pick up the tab for my cheeseburger at McDonald’s. “I’m not gonna feed the hand that bites me!” Armey declared, which had me both laughing and scratching my head.

I’m not an economist, but I’m also scratching my head about this section in Armey’s most recent post:

Look at the healthy components of our health care system. What they have in common is a large measure of independence from government subsidies and price regulation. For example, eye surgery centers, fertility specialists and cosmetic dental surgery. Costs have fallen dramatically, innovation abounds and safety improves.

Economists have a fancy term for this phenomenon. It is called price posting. When consumers see the prices available, they make better informed decisions and competitive pressures emerge and more information results which starts the virtuous circle anew. Unfortunately, by pushing consumers all the way back to their own goal line, past public policy decisions are a formidable defense against better health care in America.

It seems to me that Armey is making a false — or inapt — comparison here. Lasik, in-vitro fertilization and cosmetic dental surgery are all elective. They are not about health care; in the case of eye and cosmetic dental surgery, they’re usually about vanity. That’s why they’re not covered procedures. (IVF is different, of course, although it is still elective. Which is why most insurance companies either don’t cover it or offer limited coverage). People choose to do such procedures in order to improve their lives, not save them. My question for Armey is, Would we really be better off if we could shop around for the best price on a quadruple bypass? Or chemo therapy? Wouldn’t that lead to even greater disparities between the quality of care received by rich and poor? Unlike getting your eyes fixed (or your lips puffed up, for that matter), having a tumor removed from your colon is not optional, if you want to live. Price posting works to drive prices down for things like Lasik and dental veneers precisely because consumers can do without them if they’re too expensive. Or so I think. Readers? Mr. Armey?

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