 Hi everyone, thanks for tuning in to Big Ideas Live Recap. I'm here with Sloan Frost again, who's from Students for Liberty, and we just finished our Big Ideas Live event on the role of incentives in healthcare. So thanks for appearing with me, Sloan. We're gonna go through, yeah, thanks a lot. We're gonna go through a couple of the most important things that we talked about. So you guys hopefully will tune into the whole event, which will be posted online later. So the first thing that I wanted to talk to you about Sloan is incentives. They are not just something that we talk about when it comes to economics, although they're important in economics. They apply in all different areas of life. So did you wanna talk just a little bit about that? Yeah, sure. So this is one of the things that I find most interesting is that people tend to say that incentives don't matter when it comes to things like healthcare or education, but the reality is that you still have people, right? I mean, you still have people who are trying to either make a living as doctors or as people who run hospitals, and you still have people who are seeking care. People who are either patients or sick or caregivers, and everyone who's involved in healthcare in some way or another has constraints. So they have limited time, or they have limited budget. So they're incentives that push them to either access care in a certain way or pay for in a certain way or trade with each other in a certain way for healthcare. So all of these interactions that people have with each other and all of the decisions that they have to make on a daily basis are all influenced by this crazy web of incentives. And then you throw into that hot government intervention and government regulation, you get even more crazy incentives that push people to act in a certain way. So no matter what you're talking about, you always are going to have incentives that may change the way that you make decisions. And if you think a little bit about why they're there and what they were designed to do, it becomes a really interesting conversation. Yeah, for sure. And regardless of what you think about the government being involved in healthcare, there's no arguing with the fact that it creates a whole new set of incentives. Absolutely. And we talked a little bit about all of the different incentives that come into play. And there were three that you said are the most important to me after the event. And they were cost access and quality. So how did those play into the incentives in the healthcare system and how it affects us? Yeah, you can think about healthcare in an interesting mix of cost, access, and quality. So lots of times, and especially in our conversation today, we talked about how people who want to create a better healthcare system are worried about things like how much is it gonna cost? They're worried about is it gonna be good medical care? And they're worried about how am I gonna get to that medical care? So you talked a little bit about waiting lines, which are famous things, examples in single payer healthcare systems. And we also have this issue where, especially in the States, you can slap a label and insure it on someone and give them an insurance card, but it doesn't mean they're gonna get access to care. It doesn't mean that they're actually gonna see a doctor. So you have these competing incentives for cost access and quality. So cost, that's obviously, I don't wanna pay $3,000 every time I go see a doctor, right? So as a patient, I have insurance and then I only have to pay for a certain portion of my cost. And that can be a problem when I don't have to pay my full bill. If I only see a bill for $20 instead of $300, I may access that service differently because I've been incentivized to go more frequently because I've been paid less. So that's one set of costs. With access, you can talk about how doctors are incentivized to provide more or pricing mechanisms in their healthcare. So you don't have a menu for healthcare services, like it costs $100 to go see a doctor or costs $3 for this band-aid when you go to a hospital, things like that. So without those prices that are public, we have incentive to spend more money and not really worry about who's fitting the bill. Right. And then you have incentives for quality. So that's things like, am I providing good care? Am I being a good consumer of care? And now we have some really cool technological opportunities to advance that and to get measures out there and publish them. But if you wanna provide good quality, it means it's probably gonna come at a higher cost. And it also means a few people are gonna be able to access it. You wanna get more access. It means you're gonna have to pay more money for food to see a doctor. And it means you may not be able to see the highest quality doctor anymore. So balancing those three components is really important to incentivizing better healthcare for everyone in the population. Yeah, and we talked a lot tonight about the different ways that this affects at least the United States and Canadian healthcare systems. But as we learned, we can easily talk about that for an hour. So anybody who's interested will have to tune into the full conversation. So one of the things, the reason that I wanted to ask, it was, yeah. One of the reasons I wanted to have Sloan on Big Ideas Live is because of her piece in a Students for Liberty book called Why Liberty, which I have here and is available online for free. And she talks about the way that when you are using a healthcare system, it can seem as though it wasn't designed by people who really care. It seems as though it's too complicated. It seems as though it doesn't really care about people who are really desperate. And yet the people who designed any system are just people, right? They're not evil, they're not uncaring. Policy makers are no more evil than business people are sometimes made out to be. Everybody has a basic human caring for each other. And one of the ways that Sloan explains that this happens is that incentives are different for everybody in the healthcare system. So Sloan, tell us a little bit about how the different people working in a healthcare system are affected by incentives and how that affects the system generally. Sure, so there is a giant system that's at play whenever you talk about a population of a healthcare system. So it helps to kind of drill it down a bit to you a single interaction. So let's pretend that I'm an insurance company like we did tonight and I need to figure out who I'm gonna tell the people that I'm insuring they should go see when they need medical attention. So for example, I have a choice of two doctors. I've got Dr. Orange and Dr. Blue. And I have to say to my beneficiaries, do you wanna see Dr. Orange who is a better doctor or Dr. Blue? Well, what I can do is I can charge my beneficiaries less or have them pay a lower co-pay for seeing Dr. Orange. So that pushes the patients to go see one doctor versus another. Doctors have that too because they want to enter into a contract with the insurance company to get patients to come see them. So doctors may say to an insurance company, hey, I'll only bill you X dollars instead of X plus 10 because I want you to tell your patients. So people are negotiating with each other for more business within healthcare but it also incentivizes them to behave differently so they can get that attention. And then if you're a patient, of course, you don't wanna spend a lot of money. You want to quickly be able to see a doctor and of course with a doctor. So that means sometimes you're willing to spend a little bit more money because you think that incentivizes a doctor to be better because you're giving them more money. But it also means that you may have to go to an insurance company who's got a doctor that's able to see you for less money if you're not able to afford it. So there's lots of different incentives at play for everyone in the system. And then you've got above all this, the policy makers who are designing the system. And like we said, they're not evil, it's just the fatal conceit of a person who's a central planner trying to figure out how they can design a system that helps millions of people and that's just impossible. You can, no matter how smart you are how well-intentioned you are, so that's gonna be the best. That's why it's always better for society, for the individual to be able to have a market driven system. Yeah, as we talked about tonight and as I've talked about in previous episodes of Big Ideals Live, sometimes you don't even know yourself what you're gonna want until you actually get into a situation. So it's just impossible for anybody no matter how well informed they are to really plan for everything. So that kind of gives us an idea of the different incentives and the different people at play. How does this affect the system? How does this result in the kind of mess that we see all over the world actually? Yeah, it's terrifying. There isn't really one system and that's not figured out yet. All the systems that you think are really great if you actually examine them, they have a lot of flaws. So one of the problems that happens is that people think if they inject one item of policy or they try to tweak one program a little bit, it's gonna help, but what that often does is it creates incentives for people to behave differently. So for example, in the States, we had the Affordable Care Act, which is also known as Obamacare, which completely tried to overhaul the health insurance system here in the States, but it has a lot of consequences or things that people didn't foresee happening. So once you try to put all these incentives at play, you get people operating in different ways than you thought. So for example, under the ACA, businesses will get fined if they don't offer insurance to their employees. But some businesses are finding that they can't afford to subsidize the plans anymore for their employees because prices have gone already. So instead of they're dumping the insurance and taking the fine so that they still are paying less money than they would have if they provided insurance. So people are responding to incentives, they're responding to the rules and regulations, and sometimes unfortunately that leads to some less than optimal outcomes. Yeah, and another thing we talked about a little bit in the event tonight was the fact that people are afraid of change. Status quo bias, I think, is the name. Yes. And you definitely- Yeah, once you're in a spot, it's really tough to get out of it. Yeah, and I mean, the US just had a big overhaul, but in Canada there's always the argument about whether if you allow the boogeyman is two-tier healthcare or private healthcare that would allow poor people to die in the streets without care, and even though that's not what happens in the rest of the world, there's fear and it's reasonable because it's healthcare, it's a very important policy topic. Sure, sure. So that's just- Yes. Go ahead. I was just going to say it's interesting what you hear from other countries that are told about other countries' systems, right? Yeah. Because in the US they'll talk often about Canadian healthcare and fuel and access, and the data tend to show us that waiting lines are far, you have to wait a far longer time to see a specialist. If you just have a primary care need, it's of course cheaper to you when you go to the doctor in Canada versus when you go to the doctor in state. So there are different things that happen as a result of the programs, but it depends on your perspective at any given time, you know? For sure. So that's just kind of a sampling of what we talked about tonight on Big Ideas Live. I hope that you'll be able to check out the full event when it's posted. And also like us on Facebook, just search for Big Ideas Live or check us out on the web at fee.org slash bigideas. Thanks very much again, Sloan, for appearing tonight. Thanks for having me.