To most economists and businesspeople, it probably seems perfectly natural that health care should be sold like a commercial service by profit-seeking firms, despite the fact that until the late 1960s, there was neither organized private investment in the delivery of health care, nor large publicly traded for-profit health care corporations.
That is from Arnold Relman’s A Second Opinion: Rescuing America’s Health Care. I read Relman as offering three major arguments:
1. To the extent the private sector handles health care, we should look toward not-for-profit and cooperative means of provision.
2. Single-payer systems will work only if the supply side of health care is reformed. Government provision (see the UK) fails but so will for-profit corporate suppliers, even when combined with greater government involvement. He favors a single-payer system and urges that health care supply be reorganized into multi-specialty prepaid group practices, where doctors receive fixed salaries rather than fee for service. Many of the favored European systems involve some version of this mix.
3. He believes that market-driven or consumer-driven health care, whether of the libertarian or David Cutler pay-for-performance variety, is bound to fail.
This short book is underargued, but anyone interested in health care policy should read it.
Does he provide any reason for asserting that market-driven or consumer-driven healthcare is bound to fail, other than his apparent argument that it wasn’t done in the past?
No matter how the government tries to regulate health care, there will still be a makret for for profit health care such as elective eye surgery, dermatology, cosmetic surgery, etc.
I have yet to hear anyone explain how tattoo removal will fit in to single payer or how it is done in Europe?
From the Publishers Weekly review (available at the Amazon page): “Contrary to free-market dogma, Relman asserts, in medicine the profit imperative ‘increases costs; it may also jeopardize quality or aggravate the system’s inequity.’”
That seems to ignore the situation with plastic surgery and dentistry, where most people have little or no coverage.
Why is it so rarely argued that we need to take away the AMA’s power to limit the number of people who can go to medical school and thus become doctors? This seems to be such an obvious first step to reduce medical costs. While it could be argued that increased competition would lead to lower quality care, I’m not too concerned about that given the number of medical malpractice attorneys.
The Economist recently had an interesting article titled “Health Care on the Quick.” (http://www.economist.com/business/displaystory.cfm?story_id=E1_JDTPVVQ). Many large retailers such as Wal-Mart are providing store space to private medical clinic chains staffed by doctors and / or nurse practitioners. There are guaranteed wait time limits and flat fees in the range of $50.
I see this as a great way to introduce more competition into health care. Moreover, it should help to drive down health insurance costs that have increased due to people going to the doctor for needless and expensive visits (the typical insurance moral hazard problem).
Andrew,
Valid point. However, there would also be some pressure to cut corners in order to cut costs. I don’t think this would be an overriding factor, but I believe it is fair to say it would increase with more competition within the industry.
We can go a step further with the national test. How about private companies that administer such tests and have some liability if the medical doctors they certify later prove to be incompetent?
The best national policy is to have 50 different state policy experiments running simultaneously. The concept of a national ‘market oriented’ big plan is an oxymoron.
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