Moral hazard and the decisions that it may influence have an inherent omission bias: while I cannot force an alcoholic to take disulfuram (without a court order), the alcoholic cannot force me to provide him with alcohol. The status quo is the moral reference frame.
Moral hazard stems from a fundamental underpinning of human behavior: we learn appropriate avoidant behaviors through pain. Children with a mutation that prevents them from feeling pain have short lifespans because they do not learn appropriate avoidant behaviors, as detailed in this poignant NYT article. It is a striking article, and I don't think a person could have a full appreciation of moral hazard until they read it, so please do.
If there is moral hazard in general, it certainly exists in medicine as well. I will illustrate this through several examples.
A young man is going through opiate withdrawal. The experience is excruciating (though perhaps not more so than natural childbirth), but rarely if ever fatal. Should he be admitted to the ICU, intubated and put on propofol so that he will not experience the suffering that withdrawal entails? How about valium? An opioid taper? Suboxone? Will the mitigation of his suffering deprive him of the learning experience that withdrawal offers him?
A middle aged man has advanced COPD and bilateral pneumothoraces (collapsed lungs) with chest tubes inserted to re-expand the lungs. He is receiving adequate pain control, but it is leading to his sleeping most of the day and a reluctance to get out of bed with PT and be an active collaborator in his plan of care which includes (and is even centered upon) mobilization. Should the pain medication be reduced or withheld until he gets out of bed?
A patient complains of back pain. The physician believes that a significant reason for the pain is immobility and refusal to get mobilized out of bed. Does the physician have an obligation to treat the pain pharmacologically rather than insisting that the patient get out of bed?
A patient complains of insomnia. The physician believes that it is due in large part to sedentary lifestyle, poor sleep hygiene, lack of exercise, and failure to have active engagement with life - goals, a job, taking care of something. The physician also believes that administration of sedative-hypnotics will exacerbate these problems and ultimately the insomnia. Should the physician prescribe a "sleeper" or should s/he insist that the patient engage in the non-pharmacological interventions that may improve sleep quality?
A patient is overweight. The solution to the problem of overweight is reduction (sometimes drastic) of caloric intake and augmentation (sometimes drastically) of physical activity. Should the physician prescribe a weight loss drug knowing that it will have a nominal and temporary effect on body weight while risking significant side effects (rimonabant) and incurring significant costs - in essence, the drug is not worth the costs to the patient or society?
A patient has sleep apnea due to obesity and doesn't want to wear a CPAP mask at night. Should his insurance cover surgery to remove redundant tissue in his neck or an uber-expensive implantable stimulator to trigger his throat muscles to contract more forcefully during sleep, or should the physician (or his insurance company) insist that he lose weight?
These problems and many others are societal and personal and public health ills that arise because of patients' behavior and which cannot be cured (maybe treated, but not cured) with a pill or a surgery or a device. But as long as we continue to create and sustain the illusion that these are medical problems that can be fixed medically, we incur moral hazard: we allow people to continue the behaviors that ruin their health, falsely reassured that the pill or the knife can save them from themselves.
Sometimes it would be better to be cruel to be kind.