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Re: [casi-analysis] CPA 2004 Budget

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Colin remarks
> From an efficiency point of view, pay per service is felt to be superior
> payment through, say, income taxes, and then free at point of use: the
> resources cost something to provide, but if users can draw on them 'for
> free', then they will not face the same incentives to ration the use of
> expensive resources.  From an equity point of view, this can be very
> regressive: the poor and otherwise socially disadvantaged may be more
> to fall ill or suffer from chronic illness.
Colin  notes that the charges may increase the degree of inequity. But
what exactly is meant by "efficiency" here? If efficient means  optimum
allocation of scarce resources to satisfy medical needs on the basis of need
alone it doesnt seem efficient at all. User charges will only deter those
who have scarce dollars others will continue to use the resources when they
dont need them and that doesnt seem efficient. For the poorest they may not
seek needed medical help at all and that is surely not efficient in using
scarce resources to meet medical needs on the basis of need. So what sense
of efficiency is meant in thuis context?
   Colin  puts "for free" at point of use in scare quotes. Of
course it is not free but is paid for from taxes or the like. Even from some
economic view of efficiency it doesnt seem clear to me why this
would be less efficient. In terms of results medical systems primarily
funded through tax dollars rather than user pay cost less and produce at
least as good results as systems such as the US where user pay is used more.
It is true that expansion of user fees is fairly common but this has nothing
to do with efficiency except as an excuse to move costs from public to
private pockets. There may be little or no decrease in costs and almost
always an increase in hardships for the worst off.  Note that Colin makes
use of the phrase an efficiency point of view. This is some sort of
anonymous point of view that has great authority I guess but it is not at
all clear what it is or who holds it. It sounds like a phrase from some
neoclassical economics catechism.
  Even the idea that having no charges at point of use will cause overuse of
system is doubtful in the case of medical care. People will not break their
legs or try to get diseases so as to get free medical care. To avoid
inequities programmes may be developed to target the less well off,
programmes that have costs to administer. While some people may want
medicines they dont need most of us are happy enough to do without more
pills even if they were "free".
        From the efficiency point of view I guess even health insurance
however financed would be inefficient since the insured does not pay at
point of service.

Cheers, Ken Hanly

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