There are strange ideas, weird ideas and then there are those that just don’t make any sense whatsoever. Take, as our example for today, this one, the idea that we should cut taxes on those who will cost the NHS more to treat:
Britons should be rewarded with tax rebates for giving up smoking, staying slim or drinking less as a way of relieving the “mind-boggling” increase in demand for NHS care, a thinktank urged on Thursday. 20/20 Health says incentive schemes that reward healthy lifestyles would encourage people to be more responsible about looking after themselves and avoiding damaging habits.
This simply does not make any sense at all. And it’s also very easy indeed to work out why 20/20 Health has got itself into such a tangle: they’re simply ignorant of the economics of healthcare. Something that should makes us a tad wary of taking their advice on such things.
Smoking, boozing, being a lardbucket, these are all things that have substantial costs, this is entirely true. However, most of the costs are private costs, costs carried by the people who do or are these things. Most notably, the costs of having a shorter lifespan.
There are also public costs from these things: the healthcare treatment that people who do these things will require. But there are also savings in public costs as a result of people doing these things: most notably in the health care that people who do these things will not receive because of those shortened lifespans. Yes, it’s true, treating lung cancer is expensive but on average someone who dies of that at 67 isn’t going to be needing a hip replacement at 75 nor round the clock care during a decade of complete senescence.
And the truth is that, and it has been studied many times, these behaviours which shorten lifespans reduce, not increase, the costs to publicly funded health care systems. And when you add in the pensions not claimed (and of course the extra taxes paid on boozing and tabs) then the economic model is overwhelming.
There are substantial private costs to these three behaviours, smoking, drinking and being obese (we are, of course, assuming that all are being done to excess here, not that couple of glasses of wine a day that is positively beneficial to health) but there are substantial public savings from them.
It is this that 20/20 Health are ignorant of and thus why they’ve come up with such a strange suggestion. That those who will cost the public health care system more should be taxed less for the behaviours that will cost the public health care system more.
Madness through ignorance we might call it.