A Second Opinion

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.