Pancakes, Please

This year marks the 40th anniversary of If You Give a Mouse a Cookie, the classic children’s book by Laura Numeroff.  Years ago, I read it to my son more times than I can count—along with its delightful sequels, If You Give a Moose a Muffin and If You Give a Pig a Pancake.

They’re great stories, all built around a simple idea: one thing leads to wanting another. In the case of the mouse, he’s given a cookie… and that sets off a whole chain of requests: a glass of milk, a straw, a napkin. Eventually, he wants another cookie.

While they’re sweet, fun books, I recently found myself thinking about them in a very different context: healthcare. Specifically, the long-running—and still unresolved—debate about something called moral hazard.

So, What Is Moral Hazard?
Despite the name, moral hazard isn’t about morality—it’s about behavior. It describes what happens when people act differently because they’re shielded from risk.

Here’s a simple example of it. Let’s say four friends go out to dinner and agree in advance to split the bill evenly. One person was planning to order the $15 pasta. But now that everyone’s sharing the cost, he figures—why not get the $30 steak and a $10 dessert? His $25 splurge ends up costing him just $6.25 when the bill is split.

That’s moral hazard in action: when people don’t feel the full cost of what they consume, they may take more than they otherwise would.

Pickleball or Physician?
In health care, moral hazard refers to the idea that people might use more services than they truly need if they’re not paying the full cost out-of-pocket.

That’s the concern some health economists raise. They argue that if care is too affordable—say no copays, no deductibles—people might abuse the system. Make office visits free? Maybe someone will go to the doctor for a runny nose or a paper cut. No cost for diagnostic tests? Why not ask for every scan you read about online, “just to be sure”?

And yes, that happens. But let’s take a step back. If you were feeling perfectly fine and had a free afternoon, would you rather go to a doctor’s appointment—or play pickleball?

As the late Princeton economist Uwe Reinhardt once said:

“You always hear that the demand for health care is unlimited. This is just not true. People who are very well insured, who are very rich—do you see them check into the hospital because it’s free? Do people really like to go to the doctor?”

Sure, some people might use more care when it’s affordable—but it’s a mistake to assume that’s true for most. Getting health care isn’t a spa day. No one wakes up craving a colonoscopy.

Skip the Syrup
While some worry about people taking “too much,” millions of Americans aren’t even getting what they need—or anything at all. They’re not overusing the system—they’re avoiding it.

They don’t have insurance. Or they’re underinsured. Or the deductible and cost-sharing make seeking care cost-prohibitive. So they wait, they worry, and they hope the problem goes away. Too often, when they finally do seek care, their conditions are more advanced—and more expensive to treat.

Pancakes and Priorities
If you give a pig a pancake, he might ask for syrup. But for too many people, the pancake never comes.

When it comes to health care, we’ve spent decades fretting about overuse and inappropriate use—and not nearly enough time ensuring everyone has access to affordable care.

It’s time to flip the script. Let’s stop worrying about the syrup and start delivering the pancake—so we can move from just treating illness to building a healthier, future for everyone.

Happy reading,

Suzanne Daniels

Enjoy the weekend!

Best,
Suzanne
Suzanne Daniels, Ph.D.
AEPC President
P.O. Box 1416
Birmingham, MI 48012
Office: (248) 792-2187
Email: [email protected]