2007: Will Berkshire attempt to fix the U.S. healthcare system?

AUDIENCE MEMBER: — morning. Good morning.

WARREN BUFFETT: Morning.

AUDIENCE MEMBER: My name is Mike Klein, and I’m a general surgeon from Salinas, California.

Given your resources and experience in underwriting insurance, do you have any thoughts of entering into, or helping to solve, our health care mess?

Time is right for a new approach with Berkshire’s clarity brought to the formula. Let’s acknowledge the stakes are huge with implication for our economy and our future as a country.

CHARLIE MUNGER: Let me try that one. It’s too tough.

WARREN BUFFETT: I would —

CHARLIE MUNGER: Warren and I can’t solve that.

WARREN BUFFETT: Yeah, we can’t solve that one.

We try to look for easy problems because those are the ones we find we have the answers for. And you can do that in investments. We don’t really try tough things.

Now, sometimes life hands you a problem, not in the financial area in our case, usually, but it will hand you a problem that is very tough and that you have to wrestle with.

But we don’t go around looking for tough problems. I would say this: we do very, very little in health insurance. You know, if we were to have — if we were looking for a solution through the private sector, we would be looking for something with very, very low distribution costs.

I mean, you do not want a lot of the revenue soaked up in frictional costs between the benefits paid and the premiums received.

I don’t know how to do that, and I haven’t seen anybody else that’s very good at doing it, and you can say if you’re paying close to 15 percent of GDP for health costs, you know, somebody ought to be able to figure out something, but I haven’t heard it.

Maybe we’ll hear it in the upcoming political campaign but Charlie’s views reflect mine at the present.