You're right on. How do you explain the commitment to market solutions in the health care sphere in light of overwhelming evidence that it doesn't work?
Ideological path dependency. People who fervently believe in the sanctity of markets as the ultimate arbiter of consumer preference have a hard time accepting the idea that markets also fail. How can people behave rationally when he who gets sick does not pay the entire price and has imperfect information for making rational choices; he who prescribes does not pay and whose production is largely divorced from quality; and he who pays is indifferent to the outcomes or patient/physician preference, not to mention is playing with other peoples’ money. It’s the perfect storm of market failure.
Thanks as always for the detailed analysis Merrill. Observation about a Maryland’s cost control system. It only addresses hospitals and not care delivered outside of hospitals which accounts for the majority of healthcare. If you want to control cost, you need to control prices and cost outside hospitals as well or those providers will continue to game the system as they undoubtedly are today.
I don’t believe the Medicare for all would work as it is too complex and hard to understand. Rather, I would suggest Medicaid for all as it is vastly simpler more easy to understand for the average consumer, and involves states helping to fund the program which would make it politically more viable.
The comprehensive reform discussion in the light of the current healthcare crisis is a necessary one. I eagerly await your next post with your full proposals. Meanwhile, in addition to Arrow, we could be quoting none other than ultra free-marketeer Friedrich Hayek: “Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance—where, in short, we deal with genuinely insurable risks—the case for the state’s helping to organize a comprehensive system of social insurance is very strong.” Unlike many other countries, we're still waiting for that comprehensive system.
You're right on. How do you explain the commitment to market solutions in the health care sphere in light of overwhelming evidence that it doesn't work?
Ideological path dependency. People who fervently believe in the sanctity of markets as the ultimate arbiter of consumer preference have a hard time accepting the idea that markets also fail. How can people behave rationally when he who gets sick does not pay the entire price and has imperfect information for making rational choices; he who prescribes does not pay and whose production is largely divorced from quality; and he who pays is indifferent to the outcomes or patient/physician preference, not to mention is playing with other peoples’ money. It’s the perfect storm of market failure.
Thanks as always for the detailed analysis Merrill. Observation about a Maryland’s cost control system. It only addresses hospitals and not care delivered outside of hospitals which accounts for the majority of healthcare. If you want to control cost, you need to control prices and cost outside hospitals as well or those providers will continue to game the system as they undoubtedly are today.
I don’t believe the Medicare for all would work as it is too complex and hard to understand. Rather, I would suggest Medicaid for all as it is vastly simpler more easy to understand for the average consumer, and involves states helping to fund the program which would make it politically more viable.
Global budgeting helped deal with the gaming. There is nothing stopping states from applying it to all services, not just hospitals.
The comprehensive reform discussion in the light of the current healthcare crisis is a necessary one. I eagerly await your next post with your full proposals. Meanwhile, in addition to Arrow, we could be quoting none other than ultra free-marketeer Friedrich Hayek: “Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance—where, in short, we deal with genuinely insurable risks—the case for the state’s helping to organize a comprehensive system of social insurance is very strong.” Unlike many other countries, we're still waiting for that comprehensive system.
Never read that quote from Hayek. Nor, I suspect, have many Republicans. The cognitive dissonance would be too discombobulating.