[July 30, 2007 @ 1:00 pm] David Hogberg

One of the main problems with our health care system is that it is filled with academics and activists who think they know better than you and I what type of health insurance and health care you and I need. A good example is Katharine Lyon, quoted in this article on Mental Health Parity:

If parity boosts insurance costs, employers may drop mental health benefits altogether, warned David Hogberg, adjunct scholar at the conservative National Center for Public Policy Research.

That’s unlikely, said Katharine Lyon, vice president of the Florida Council for Community Mental Health. Where there is parity, she said, “they find out there’s less absenteeism, and employees are able to work better.”

The implication, then, is that businesses that do not offer mental health parity as part of their health insurance packages are ignorant of the benefit it has of increasing profits. When employees have mental health benefits on par with other benefits, they skip work less often and are more productive, thereby increasing the amount of revenue taken in by the businesses they work for. And do those added revenues exceed the added cost of including mental health parity in a health insurance plan? Of course, they do! Otherwise, there would be no increase in profits. Thus, if we follow Lyon’s reasoning, there is little reason to worry about forcing businesses to offer mental health parity, because doing so will be good for them.

Here is the question that the likes of Lyon never ask themselves: If mental health parity is so good for the bottom line, why aren’t more businesses already offering it? My experience with the likes of Lyon is that such people have little if any understanding of how markets work — nor do they seem to have any inclination to learn, because doing so would mean they’d have to give up on their “I know what’s best for you” mentality and all of the wonderful feelings of superiority it yields.

But on the off chance such folks are open to a little edification, they should know that markets, thanks to things like profits and market share, are very efficient conveyors of information. If something like mental health parity were so good for the bottom line, it wouldn’t take long for most businesses to figure it out. A few businesses would try it, and if it really worked the way Lyon claims it does, then they would have better performing workers which would lead to higher profits and greater market share. Other businesses that had not implemented mental health parity would wonder why their profits are not increasing and why their market share is declining. It wouldn’t take long for them to figure out that the difference is that they don’t have mental health parity. They would soon include mental health parity in their insurance benefits. Profits are such a great motivator!

The fact that businesses are not doing this almost certainly means that employers have figured out that the benefits of things like decreased absenteeism do not exceed the increased health insurance costs due to adding mental health parity. That’s the market sending us a loud and clear message, but the likes of Lyon seem to have no interest in listening.

Alas, the problem isn’t that businesses are ignorant of the benefits of mental health parity. The problem is that the likes of Lyon are ignorant of how markets work. However, that would be no problem at all if Lyon wasn’t intent on using government to force her ignorance on the rest of us.

One comment

  1. mani kanna Says:

    I think it misguided to imagine that someone would know what it is i need,I may be no expert but coming from an addiction to prescription drugs that i got stuck on after after a medical procedure,i would want that i decide what works for me.
    mani kanna

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