• The leading cause of personal bankruptcy in the US is unpaid medical bills
• The death rate for Americans without health insurance is 25% higher than for those that have it
• Americans spend 2.5 times what the rest of the Western world pays per capita for health care
• The US has one of the lowest doctor/patient ratios in the West
• Americans visit doctors and get admitted to hospital less often than people in most countries in the West
• Americans are among the least satisfied with their health care system
• US life expectancy is significantly lower than the average
  of Western nations, while childhood immunization rates are lower and
  infant mortality is higher
• Americans spend over three times as much per capita on healthcare paperwork and administration as Canadians
• Despite the high cost, the US is almost alone in the West
  in not having universal health care, and 45 million Americans have no
  health insurance at all

There is overwhelming evidence that people with no, or inadequate,
health coverage are sicker, that this illness translates into poor
physical appearance (bad teeth especially) and low self-esteem, and
therefore these people have great difficulty getting decent-paying jobs
and hence don’t qualify for health insurance. The perfect vicious cycle.

The reason for this, says Gladwell, is the perpetuation of a neocon
myth in the US that isn’t accepted anywhere else in the Western world.
That myth is called “Moral Hazard” and it says that having insurance changes the behaviour of the insured.
If you have generous health insurance, Moral Hazard says you’re going
to go to the doctor and the hospital more often, sometimes
unnecessarily, just because it’s free. The evidence is all to the
contrary, but the myth prevails in the US nevertheless. What’s more,
there is evidence that in the few areas where people actually do avail
themselves of health care services that aren’t absolutely, critically
needed (like dental checkups), the preventative value of these services
exceeds their cost, so such ‘abuses’ actually save the health care
system money. 

In some areas of insurance, Moral Hazard actually has some validity.
For example, the S&L failures in the 1980s were caused to some
degree by reckless lending due to generous FDIC government guarantees.
The assurance of bailouts if loans failed actually encouraged some
S&L’s to lend irresponsibly. But this simply doesn’t apply in the
health industry. Most people don’t frivolously use medical services
just because they’re available free. And users of Medicare, the only
aspect of the US health care system based on the social insurance model
(which equalizes financial risk between the healthy and the sick) –
the model used in every other Western nation — are consistently vastly
happier with their plan than Americans with private health insurance.

Bush’s new Health Savings Accounts, nevertheless, presupposes Moral
Hazard is the principal reason the US health system is in crisis, and
its effect will be simply to reduce the use of the health system by the
country’s sickest people. Instead of the social insurance model it uses
the discredited actuarial model (like car insurance, where cost is
related to the perceived risk of making claims). So many Americans with
expensive medical conditions cannot get insurance at all. Stanford
economist Victor Fuchs says “this reduces the social redistributive
element of insurance” and that Health Savings Accounts are hence the antithesis of universal health care.

Rather than technical arguments, Gladwell says, Americans should be asking themselves these questions:

• Do you think redistribution of risk (so that the healthy subsidize the sick) is a good idea?
• Is it fair that those genetically predisposed to illness
  and tooth ailments, or whose poverty complicates diseases like asthma
  and diabetes, or who are unlucky enough to be in serious accidents,
  should bear a greater proportion of health care costs than those who
  aren’t?

That’s not to say that there aren’t people who abuse the system. But to
punish 45 million Americans (at least) because of a mythological belief
that people are naturally inclined to abuse anything they can get for
free is not only cruel and inhumane, it’s ideologically obsessive,
wrong-headed and irrational. But then that’s the very definition of the
Bush administration and their cronies. Tragic, and disgraceful.