Truly stunning to hear some Republicans advocate for free Coronavirus testing and treatment for the uninsured.
Rep. Ted Yoho (R-Fla.), one of the most anti-ACA members:
“You can look at it as socialized medicine, but in the face of an outbreak, a pandemic, what’s your options?”
— Matt Fuller (@MEPFuller) March 3, 2020
Epidemics are full of externalities. An externality is a benefit or loss that is not received by the entity paying the price for a change in status. Positive externalities which distribute net benefits to the non-payer will be systemically under produced while negative externalities which shifts costs to entities that don’t collect revenue from the primary process will be overproduced.
Most of our medical finance system is premised on the idea that there are few externalities. If I get my knee repaired, I, or my insurer, bears the full price as I, presumably, will bear the full benefit of a knee that would not make funny noises as I try to dance.
Infectious diseases have some benefits and costs that can be interalized. An individual who goes to the hospital and whose treatment enables survival is alive. However, the decision to be screened and if positive with low acuity symptoms, to self-isolate/quarantine has small internalizable benefits, large costs borne by the patient as their life and the lives of their family and close associates may be thrown up in the air. However, quarantine and other social isolation measures are intended to produce large social externalities. An infected individual who is in contact with people who are either already infected OR are taking appropriate precautions is unlikely to infect other people. Those people who would have been infected if the currently quarantined individual went about their daily life but aren’t infected because of an effective quarantine, benefit without paying for the quarantine.
Breaking potential infection chains is a key to stopping potentially epidemic infectious diseases. Breaking those chains can occur through vaccinations or quarantine or burnout. Vaccinations and quarantines rely on the production of significant positive externalities. If we want lots of positive externalities, we, as a society, should be willing to pay for them through our collective resources of the federal government. Paying for medical care is a way to buy both internalizable gains for the individual patient and publicly consumable externalities.