Some goods buoyed by groups

When Obamacare was in the works I remember crossing words with someone who proclaimed, indignantly- Everyone should have the right to healthcare! I suggested that everyone in the US did have access to care. They simply had to show up to the emergency room of a public hospital, and the code of conduct would require the medical staff to provide care.

It’s nice to hear that confirmed by an expert, Amy Finkelstein, in this interview. What she says is that there are certain products and services a society will offer based on a social contract of civility. For starters, fellow human being will not be allowed to die in the street. Action will be taken to provide the frail, the vulnerable, or the simply irresponsible, with care.

What I said back fourteen years ago, and what she says now, is that it was never whether people would get care, it was how it would be paid for. People with insurance rely on the coverage to payout. People without insurance, according to her calculations paid around twenty percent of the tab. The rest was picked up by the hospitals or the public purse.

No matter the overarching accounting system that ends up allocating resources to health expenditures, this obervation once again confirms that some products are supported by social contracts. And thus they have more efficient outcomes when the group (society, neighborhood,…) devotes some concern to the cause. If you help with kids sports, you are contributing to a reduction in child obeisity. When you taxi an elderly neighbor to their routine doctors appointments, you are preventing them from requiring more expensive treatments later.

Insurance companies understand groups from an underwriting standpoint. And that’s one way to think about it. But what I’m referring to is the time and energy people devote to the habits and actions of folks they touch on a day to day bases. This energy, if you will, squarely supports (or detracts) from public goods such as health, or safety, or family cohesiveness, or local governance. This energy is the energy behind institutions.