“Moral hazard” is the term economists use to describe the fact that insurance can change the behavior of the person being insured. If your office gives you and your co-workers all the free Pepsi you want—if your employer, in effect, offers universal Pepsi insurance—you’ll drink more Pepsi than you would have otherwise. If you have a no-deductible fire-insurance policy, you might be a little less diligent in clearing the brush away from your house.
The article goes on arguing the fallacy of applying the concept of moral hazard to health care (Quoting Princeton economist Uwe Reinhardt: “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? Do they check into the hospital instead of playing golf?”) and describing the failure of the US healthcare system: in its maximizing efficiency attempts and in its disregard for preventive medicine, this system is the most expensive, least efficient, and eventually, the least successful among the health care systems of the industrialized countries.
The concept of moral hazard, especially when applied to health care, strikes me as an extreme example of lack of social empathy.
After Katrina, I have wondered about the direction this country is going. I have seen wonderful examples of intense individual and group empathy, but also many glaring demonstrations of lack of social empathy (how FEMA and other federal agencies reacted; the Gretna Crescent City bridge incident). Looking at the political choices this country has made recently and less recently, one sees a wealthy society that rejects the socialization of health care (see Malcolm Gladwell’s The Myth of Moral Hazard), resists the idea of using tax money to give necessary basic services for everybody, maintains a ridiculously low minimum wage that keeps working people in poverty (and unable to afford health care), prefers the concept of charity to the concept of socialized services, and seems fully unaware of the personal and social devastation brought by the lack of a protective net to catch people from falling into misery.
As a nation, the United States are low on the distance empathy continuum. The concept of us tends to be narrow, except when it’s used to distinguish Americans from the enemy (Us and Them).