Greg Mankiw just posted this graph, which came from this article on investors.com. here’s the money quote:

“By not knowing the full costs associated with health care, consumers demand more and ‘overuse’ it,” Kenneth E. Thorpe explained a few years back in Health Affairs.

Americans would be more judicious in seeking health care — they would self-ration — if the right incentives were in place. An effective way to cut overuse and bring down costs would be to encourage through public policy the use of health savings accounts. If consumers used HSAs to pay the full amount for medical care at the point of service rather than letting employer-funded insurance or a government program pay the bills, the demand would fall.

David Goldhill advocated the use of HSAs in his article in the Atlantic, and I think the solution he proposes is the most complete that I’ve seen purposed (but it’s politically untenable right now).

So what’s important now is improving our lot by encouraging public outrage and offering early adopter, market-based solutions that start to show success metrics. Here’s a 30 slide presentation I gave on how I think that’s starting to play out.

I’d love to see more people suggest tactical next steps within this framework (or, indeed, to suggest how we might improve or expand on this framework).

submitted by Tyler Willis