ABSTRACT

Most proposed governmental initiatives relate to paying for medical care. Most of the organizational proposals are closely related to financial incentives. The author emphasizes that the financial side of national health care is not the whole field of national policy toward health and medicine. There are several common ways of coping with incentives in the insurance business. One is to make the insured pay a fraction of all the costs he incurs, the fraction being small enough to avoid financial calamity and large enough to make him or his physician think twice before incurring any expensive treatment that is at all optional. This is called coinsurance. A second feature is deductibles, familiar to us in automobile and household insurance as well as in medical insurance. Deductibles serve two purposes. A third feature that makes sense is a wider use of indemnity insurance. The important thing about the poor in health insurance is that the problem is mainly money, not medicine.