Increasing Affordability Key to Increasing Health Care Access
For anyone with time to spare, I highly recommend an article by eminent surgeon and recent MacArthur “Genius” Atul Gawande over at the New Yorker (it’s more than 6,000 words and eight pages long — enjoy!).
Gawande discusses the sobering data on our national health care spending, investigates the sources of skyrocketing costs, and sketches some general solutions that the public should keep in mind. Primarily, Gawande argues against the overutilization of medicine, and the excessive use of medical services.
When comparing areas of differing average health care costs, he found that areas of high Medicaid per-patient spending utilized, on average, 20 percent more diagnostic tests. Ironically, the data suggests no positive correlation between spending and quality of care, and even implies that average quality of care per several metrics decreases as per-patient spending rises!
Gawande further suggests that the current structure of incentives for doctors, one based on quantity as opposed to quality, is non-conducive to sustainable costs. He writes:
Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coördination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later?
Gawande looks to successful, low-cost cities and care networks such as the Mayo Clinic for answers, and he advocates increased cooperation among the community of care providers to best provide transparent, accountable care.
Only so much space is afforded me here, so I will leave you to read the article and simply note that, as the nation descends into a pivotal debate over health care plans, HMOs, doctors, legislators, and common citizens should look beyond “public vs. private vs. co-op.” Rather, what matters most at this juncture is not who pays (although that’s certainly important), but how much they pay. After all, the first step to making health care more accessible is to render it more affordable.





Most people don’t know how to repair their own car, so they call on an expert. There is every incentive for auto repair shops to take advantage of ignorant customers by calling for more work than is really necessary, and many shops do this. But some don’t and they find themselves working at capacity during all open hours. You can often tell the honest mechanics simply by asking how long it will be until they can take a look at your car(this method is not perfect, but it is a decent indicator).
As I see it, the present Mayo Clinic model should, economically speaking) be suffering from a shortage of care– meaning that the customers who demand Mayo-quality care at the Mayo price should outstrip the ability of the MC to provide for them all. Reasons why this might not be the case:
1. People are ignorant of the cost/benefit analysis of various healthcare institutions
2. it is for some reason inefficient to comparison shop
I think option 2 is far more likely here, especially when individuals don’t face the cost of their care, they will certainly be willing to acquiesce to additional expensive treatment options.
I propose something utterly un-addressed in the article: Break up the AMA monopoly on healthcare. This proposal has been trotted out before by no less a free-market public policy advocate than Milton Friedman, who realized that, as with all things, restricting supply results in increased costs and shortages. As with auto-repair, better service at a lower price will win in a market sense, with the added benefit that the internet offers a wonderful tool for allowing individuals access to remarkable amounts of in-depth local information. Google maps will even now allow you to rate you experience at local businesses, and in a deregulated healthcare market this would be only one of many avenues to precious information available to customers.
Comment by Josh Smith — June 15, 2009 @ 2:32 p.m.