… to report to you from Utilitarian La-La Land:
A new NBER paper talks about a different kind or moral hazard in health care markets (typical moral hazard explanations contend that individuals engage in unhealthy behaviors at a suboptimal level because of the possibility that cures exist for whatever diseases we might contract as a result of this poor behavior): you can be too healthy!
That’s right folks, economists have now flown off the utilitarian handle. The argument goes something like, if people are too healthy and are not contracting diseases, there will be less of an impetus for companies to innovate and invest in technologies to cure diseases. The authors argue that Medicare currently acts as a (efficient) subsidy to make people obese for just this reason. God only knows what policy implications “do-gooder” economists can think of. I can guess one: government subsidies for our winter and spring break trips to tropical areas so we can contract Dengue Fever, River Blindness, and all manner of tropical diseases that are woefully under-researched. I’m packing my camping gear for an Amazon River float trip!
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