Healthcare, safety regulation, and incentives

To take a break from high theory, I thought I’d formulate a few thoughts on the current hot topic in Anglophone Blogtopia, the NHS and socialised healthcare.

It rather seems that there are two sorts of things going on. One is a nuanced, complex, open-ended discussion on the best ways of organising healthcare, and one is a shouting match. The sort of approaches that make sense in one are inappropriate in the other. And the fact that one is happening can get in the way of the other.

I certainly wouldn’t say one is better or more noble – it might be nice if politics was entirely a matter of calm and reflective discussions but in the sort of world we inhabit (in particular, a world of class conflict) it isn’t, and when one side is shouting there’s no point in the other side not shouting, or shouting less loudly than they can.

And when one side is loudly proclaiming that Stephen Hawking, in a socialised healthcare system such as the one he is in, would not be kept alive as he has been, in precisely such a system, it’s clear that shouting is in order.

And I have no doubts about which side of that shouting match I’m on. Yay socialised medicine, boo private health insurance. To put it another way, given that healthcare does need to be rationed (being scarce), how rich people are is not a rational factor by which to ration it. So yay and boo.

So having said that, I had some random thoughts about institutional design which shouldn’t be taken as implying anything about the yays and boos.

The observation, which is based partly on personal experience, and partly on an argument put to me by a prominent right-libertarian, concerns the approval of new treatments by safety regulators, and their subsequent use while still risky and untested.

There are two sorts of mistake that you can make – over-caution and over-confidence. You might hold back or not use a treatment which would be safe and save lives (error A), or you might go ahead and use a treatment which turns out to cause serious problems and cost lives (error B).

Read the rest of this entry »