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Consumers Are Just Too Dumb

February 11, 2010

I’ve heard this one before:

That all sounds perfectly innocuous [the Paul Ryan Roadmap]: Who wouldn’t want seniors taking the initiative and hunting around for the best bargains? But it’s not clear how many seniors really have the ability to navigate the world of health care with the sort of sophistication to really hunt down the most cost-effective care, even if, as Ryan promises, they’d have more information at their disposal. At the very least, you’d want to give seniors ironclad protections when it comes to the design of insurance products–making sure a wide array of services were covered and that out-of-pocket spending were limited.


This is a critical difference. If you simply reduce the money flowing into Medicare, relying only on the wits of beneficiaries to figure out how best to spend what’s left, seniors are bound to end up with less care. That’s the Republican method. But if you also introduce system-wide changes that reward more efficient care and force down provider prices, the dollars in the program really might go farther–so that spending less doesn’t always mean getting less. That’s the Democratic approach.

This is your not-so-classic “patients didn’t go to medical school, so we can’t expect them to know what they need to buy and how much they should pay” argument.  It seems to make sense on its face, until you compare it to other areas of the universe.  Ramesh:

Computers are really complicated, and impossible for most people depending on them to understand. There’s no way we can ask individual consumers to shop around and expect the process to lead to lower prices and increased efficiency. We need the government to take charge. I’ve got a study that proves it.


Ramesh — We’re also too stupid to figure out where to take our cars when they break down. It’s just so complicated. I once brought my car to the bagel shop on the corner. I was all like, “Hey fix my car.” And he was like: “we don’t fix cars we sell bagels.”

If only there were car repair businesses that competed for the jobs to fix cars..

I’ll probably have a post later bemoaning Chrysler vehicles, whose parts are measured in metric for some reason, because my Jeep has been treating me like a read-headed step-child recently.  But consider this: do you think an average person ever has a problem with their car that they know how to fix other than a battery that went dead due to the headlights being left on?  Of course not, because the average person doesn’t know how a car works any better than he knows how a computer works.  And an average person doesn’t know how a computer works any better than he knows how a person’s circulatory system works.  Of course, costs for computers and cars are much less inflated than health care costs, primarily because people care more about their bodies than their Crown Vics and more about their Crown Vics than their iPhones.   For some reason, however, there is a persistent line of reasoning which says that consumers aren’t smart enough to buy anything more complicated than construction paper for themselves at a reasonable price because they don’t know anything about the subject.  Sure, it’s cheaper to fix your car if you know how, but that doesn’t mean the costs of fixing your car are out of this world just because everybody isn’t as knowledgeable as your average auto mechanic.

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