Fareed Zakaria has an opinion entitled Curbing the cost of health care.
“[T]he situation on the ground suggests that markets work imperfectly in this realm.”
He notes that France seems to get better results treating lung cancer at 1/8 of the cost. If my math is right, that means France spends 12.5 cents for every dollar we spend on treating lung cancer and gets much better results. He notes that Britain spends 1/5 what the U.S. does on diabetes treatment (20 cents per dollar) and gets better results.
This doesn’t seem to be the voice of a socialist hater of free markets. He seems almost apologetic. But one of the problems seems to be that the market incentives for health care providers aren’t in favor of efficiency or wellness.
France and Britain are better at tackling diabetes and lung disease because they take a systemic approach that gives all health-care providers incentive to focus on early detection and cost-effective treatment and that makes wellness the goal. “In America,” he said, “no one has incentives to make quality and cost-effective outcomes the goal. There are so many stakeholders and they each want to protect themselves.
We spend twice as much on health care as any other country and get outcomes that are the same or worse. That has to mean there are horrible inefficiencies in the system; and the market’s invisible hand isn’t doing a lot to sort things out. This isn’t a simple transaction where a consumer compares easily analyzed widgets and makes purchasing decisions based on clear information about quality and price or simply walks away from the transaction if there are no satisfactory offerings. Health care is complicated; quality can be subtle and delayed; price is only loosely based on cost and both are horribly opaque to the consumer. And, so often, the transaction is anything but voluntary. It’s often a matter of, literally, life and death.
I myself have an uneasiness about the Affordable Care Act. It’s a Rube Goldberg machine that might not work well if at all. But, for political reasons, it’s all we could get. The status quo is broken, cruel, and awful. Politicians demanding a return to the status quo (usually with a call for repeal and only vague mumblings about a replacement) are, at best, being petulant because “their side” lost.