Homer Economicus by Joshua Hall

Author:Joshua Hall
Language: eng
Format: epub
Publisher: Stanford University Press
Published: 2014-07-25T16:00:00+00:00

12

PAGING DR. HIBBERT

What The Simpsons Can Teach Us About Health Economics

Lauren Heller

WITH THE RISE IN HEALTH CARE COSTS over the past few decades and the recent passage of health care legislation, issues in health economics have been on the minds of many Americans. What we may not realize, however, is that The Simpsons has been trying to teach us health economics for years. Through a satirical and witty view of the world, the town of Springfield has poked fun at many of the main issues in health and health care that are being debated in cities and towns throughout the United States today.

Most of the major issues in the economics of health care provision can be related back to two main concepts: asymmetric information and the role of third-party payers for health services. One of the fundamental assumptions common to most basic economic theories is the idea of perfect information. Economists typically assume that all parties in a transaction know all of the pertinent facts necessary in order to make an informed decision. Usually, this assumption works pretty well and allows us to focus on the aspects of an economic problem that are most relevant to its solution. This assumption is invalid, however, when we look at the current structure of health care provision in most countries. Doctors tend to know more about available treatments than patients do, and patients usually know more about their own health status than insurance companies do. This is further complicated by a complex system of government regulations and third-party payers that prevent any of these parties in a health care transaction (doctors, patients, and insurance companies) from knowing the true costs and consumer valuations for health services.

Matt Groening and the other creators of The Simpsons have not been oblivious to the increasing complexities of health care provision that have evolved over the years. In fact, scenes from many episodes centrally focus on such information problems, causing a great deal of discussion about health care policy over dinner tables and around water coolers across America. Indeed, the Simpson family can teach us a great deal about health economics, and in this chapter we will discuss these lessons in detail.

The Demand for Health and Health Care

The demand for health care services is a derived demand: we do not usually derive happiness from visiting the doctor, but from the increased level of health that visiting the doctor promotes. We demand most other types of goods, such as movie tickets, because we expect to directly enjoy the benefits that those goods provide. In contrast, it is unlikely that many of us enjoy visiting the doctor because we receive a high level of enjoyment from the experience of the visit itself. Instead, we visit the doctor because we anticipate that the visit will result in an increased level of health, which will make us happier in the future. In addition, because the choices we make in life can directly affect our health status later on, we as people are both consumers and producers of good (or bad) health.

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