Health care is something that affects everyone, and if we don't do something to make affordable health care available to Americans, we face the real possibility of both public health and economic disasters. Our current way of dealing with health care is a mish-mash of stop-gap measures that are becoming less and less viable as time and technology advance. For example, the current program for providing health care to the poorest Americans is to have them wait until their situation is critical, and then send them to an emergency room. This is, quite possibly, the most expensive and lease efficient way of providing medical care to people. So, what do we do?

Princeton economist Paul Krugman and his wife, Robin Wells, have an article in the 23 March issue of The New York Review of Books titled The health care crisis and what to do about it in which they present a good introduction to this real problem facing Americans. I highly recommend taking the time to read it.

They begin by looking at the current patchwork of health care programs, and why they're quickly falling apart. Take, for example, what most Americans probably consider the "normal" way to get health care - employer provided health insurance. As Krugman and Wells explain, this idea worked right after WWII, but today it makes little economic sense.

Health care costs at current levels override the incentives that have historically supported employer-based health insurance. Now that health costs loom so large, companies that provide generous benefits are in effect paying some of their workers much more than the going wage—or, more to the point, more than competitors pay similar workers. Inevitably, this creates pressure to reduce or eliminate health benefits. And companies that can't cut benefits enough to stay competitive—such as GM—find their very existence at risk.

Rising health costs have also ended the ability of employer-based insurance plans to avoid the problem of adverse selection. Anecdotal evidence suggests that workers who know they have health problems actively seek out jobs with companies that still offer generous benefits. On the other side, employers are starting to make hiring decisions based on likely health costs. For example, an internal Wal-Mart memo, reported by The New York Times in October, suggested adding tasks requiring physical exertion to jobs that don't really require it as a way to screen out individuals with potential health risks.

The conservative solution is to create disincentives for consuming health care by placing more of the financial burden on everyday Americans - something President Bush has proposed with his "health care savings accounts". The thought is, if you have to pay for medical care yourself, you'll only go when you really need to. This, of course, assumes that everyone is both a doctor and always making rational, efficient decisions. Unfortunately, that's just not the case in the real world.

Yet another problem with consumer-directed care is that the evidence says that people don't, in fact, make wise decisions when paying for medical care out of pocket. A classic study by the Rand Corporation found that when people pay medical expenses themselves rather than relying on insurance, they do cut back on their consumption of health care—but that they cut back on valuable as well as questionable medical procedures, showing no ability to set sensible priorities.

What Krugman and Wells find is that the preponderance of the research shows that a public health program would be cheaper, more efficient, and higher quality than a system of private health insurance. Expect this to be a long time coming, though. Conservatives have been, for decades, publishing Chicken Little stories about how public health programs are evil. Only, there's no reason to really think that - even from a pro-business, capitalist perspective.

Capitalism recognizes that certain public goods cannot be provided by the market - national security, police, and fire departments for example. Why, then, are we so adverse to recognizing what's been obvious to the rest of the civilized world for a long time: public health is a public good that cannot be efficiently provided for by the market.

A large part of the reason is, of course, the excellent job that the pharmaceutical and insurance lobbies have done in propagating misinformation. Krugman and Wells provide a good start in countering the industry propaganda, though, and explain that if we want to provide the best health care, most efficiently, and at the lowest cost - we need to put aside our ideological hang-ups and start looking at the facts. Public health care won't destroy our capitalist economy, and it might very well save it.