To attract prospective employees after World War II, companies that couldn’t compete on wages (war era controls were still in effect) offered medical benefits. Today, more than 60 years later, roughly three-fifths of American have employer-subsidized, third-party health insurance.
The problem with having a third party pay for our health insurance, however, is that there’s no incentive to be healthy – and even less to shop around for a better price. In fact, just the opposite is true. People want to get everything that’s coming to them, which encourages glut.
Most people will make sure they keep up the maintenance of their automobiles to avoid any major mechanical problems because if they don’t the money comes out of their pockets. If people were more directly financially responsible for their health care they would take better care of their bodies. This is crucial for progress in healthcare, since to date, the bad effects on health of certain lifestyle choices-poor diet, overeating, smoking-have done little to alter peoples behavior. If , on the other hand, consumers were forced to shoulder more of the financial burden of their lifestyle choices, finally, perhaps, they’d be motivated to purse healthier choices.