Moral hazard is a pretty simple idea: The less you bear the consequences of your actions, the more reckless you'll be. And it's often applied to health care: The less it costs, the more you'll consume. That's why conservatives tend to want you to pay for everything out of pocket, and see universal coverage plans as surefire ways to send costs skyrocketing. If you're paying more for care, you'll be able to afford less of it. But it's a bit bizarre of a theory.
Currently, if I want a bar of precious, precious gold, I have to pay a lot of money for it. If someone let me into Fort Knox and said the gold was on them, however, I'd take as much as I could possibly carry. I like gold! The more the better. That's not really the case with colonoscopies, or triple-bypasses. Now, you could make it so I can't afford colonoscopies, in which case I can't get them, but making it so I can have an unlimited number won't compel me to make them a weekly event.
Indeed, the reason people get medical care -- in particular expensive medical care -- is because their doctors tell them to. I have never in my life sat up in bed and thought, "huh, I should really get some laparoscopic surgery." If I get a surgery, it's because my doctor told me to. And if I can't afford it, I have to ignore his diagnosis.
For that reason, if you want to safely cut back on care patients buy, you need to get doctors to stop recommending so much wasted care. You can do that in a few ways: Put them on salary rather than on fee-for-service deals, so they don't make more money when they recommend treatment. Create new research institutions that test the cost effectiveness of care so they have a better idea of which treatments are worth recommending. Offer bonuses for using proven therapies. Etc, etc. But this idea that the way to better run medical care is to rejigger the financial incentives so patients have to ignore their doctor's advice is really quite bizarre.
