The third-party payment problem

posted by
February 21, 2012
Adam Smith Institute
by Tom Clougherty  
Posted in Commentary

"[T]aking out insurance (or paying taxes) so that some third-party pays when a big-ticket, catastrophic health expense comes your way is perfectly rational. But paying someone else to take responsibility for your predictable, routine, run-of-the-mill health costs is crazy. It introduces huge dead-weight administrative costs and seriously distorted incentives, and is one of the key drivers of out-of-control healthcare inflation." (02/21/12)

http://bit.ly/xH27MS  

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