Charles Courtemanche

Discussant Comments for “Health care is an individual necessity and a national luxury: applying multilevel decision models to the analysis of health care expenditures” by Thomas Getzen Charles Courtemanche

Summary • Debate in literature about whether health care is a necessity or luxury good • Individual-level U.S. data: income elasticity of health care around 0 • Country-level data: income elasticity of health care > 1 • Shows that these results are not contradictory if risk pooling (i.e. insurance) • Insurance renders budget constraint irrelevant for individuals, but not for entire health care systems

Strengths • Very important paper: reconciles large literature on important topic • Great example of obtaining powerful results through a relatively simple model • Excellent summary of existing literature in Table 1

Comments/Suggestions • Model assumes full risk pooling, but in most countries the individual faces at least some of the cost of care. This suggests there should be at least some income elasticity at the individual level. Why don’t we see this? • What about other possible explanations? • Heterogeneity • Endogeneity • Model most applicable for a single-payer system. What about a more complex system such as the U.S.? • Would like more structure/organization in the paper

Charles Courtemanche