Praying for a Solution

One convenient thing for limited government types is they get to avoid many of the tricky issues that develop when action is undertaken by the government on behalf of individuals. If you believe individuals should have the sole prerogative to their health decisions, for instance, you needn't worry much whether they then choose to spend their money on silly things. Transfer that authority to the government on behalf of the polity, however, and wastefulness becomes less innocuous:

Prue Lewis listens as they explain their symptoms. Then Lewis -- a thin, frail-looking woman from Columbia Heights -- simply says, "I'll go to work right away." She hangs up, organizes her thoughts and begins treating her clients' ailments the best way she knows how: She prays.

This is health care in the world of Christian Science, where the sick eschew conventional medicine and turn to God for healing. Christian Scientists call it "spiritual health care," and it is a practice they are battling to insert into the health-care legislation being hammered out in Congress.

Leaders of the Church of Christ, Scientist, are pushing a proposal that would help patients pay someone like Lewis for prayer by having insurers reimburse the $20 to $40 cost.

The provision was stripped from the bill the House passed this month, and church leaders are trying to get it inserted into the Senate version. And the church has powerful allies there, including Sens. John F. Kerry (D-Mass.), who represents the state where the church is based, and Orrin G. Hatch (R-Utah), who said the provision would "ensure that health-care reform law does not discriminate against any religion."

This story is usually packaged to fit into a debate about church and state, but let's slide that to the side and instead inquire about efficiency: could paying for prayer be a less wasteful use of tax dollars than the alternatives?

The instinctive answer is no because prayer can at best have a placebo effect--better to spend the money on more effectual ends. This answer is incomplete, however, because we have to specify at what margin we're thinking: Are we talking about the first dollar one spends to cure an ailment, or the ten thousandth?

Most knowledgeable people seem to think Americans overspend on healthcare. That is, the extra dollar we spend doesn't bring extra benefit. To reduce waste, we could reduce our spending to a level where we're still getting a bang for our taxpayer buck, but this is the government after all, so we can forget about that. Instead, seeing as the extra treatment brings us no extra benefit, we could just select cheaper treatments in order to hie away waste. At the end of this line of reasoning lies the sort of counter-intuitive conclusion economists hold so dear: paying 20 bucks a pop for prayer can be a more efficient use of healthcare spending than, say, paying for a $100 visit to the doctor.

It's true that for the first dollars we spend we're better off ignoring faith-based solutions, but at some margin, going to a witch doctor is just as worthwhile as going to the family doctor. And if we take a Hansonian view of heathcare, that margin is at a level lower than we think.