The Grossman model expands on Gary Becker's theory of human capital by asserting that a person's investment in healthcare is the biggest influence on their health. Grossman writes explicitly that "one of the novel features of the model is that individuals "choose" their length of life" placing responsibility for health on the individual. The U.S. healthcare system is market based and individuals are given more choice in terms of providers; where does this leave the more vulnerable population (sickest/ impoverished)? Does the U.S. healthcare market lead to innovation or is private equity failing those of lower socioeconomic status?
In reply to Moni D'Oliveira
Vulnerable populations in the U.S. healthcare system
by Moni D'Oliveira -
The design of the U.S. healthcare system was heavily influenced by the RAND HIE experiment of the 1970s. The experiment placed about 6,000 people in 4 different insurance cost-sharing plans. The experiment found that people are price sensitive to insurance and utilize healthcare more when they pay less. However, the RAND HIE experiment found that between the significantly different rates of utilization there was no difference in health. Policy makers interpreted the findings to mean that cost-sharing insurance plans cut utilization without hurting health which is why Americans pay so much towards their healthcare through co-pays and deductibles. Those who designed the U.S. healthcare system failed to consider the flaws of the RAND HIE experiment. It was impossible to avoid selective attrition in the experiment. Despite lump sum bonuses offered by the researchers, people who were the most sick would leave the experiment if they were assigned a cost-sharing plan that was expensive considering their needs for care. The RAND experiment also monitored health over a short period of time due to the expense of the experiment when health is something that accumulates overtime. All in all, the cost-sharing design of the U.S. healthcare system is not considerate of the most vulnerable and someone's health often relies on their ability to afford healthcare (/their socioeconomic status).