Filed under: Capitalism, Economy, Freedom, Health Care | Tags: Command and Control Medicine., ObamaCare Doesn't Work, The Affordable Care Act
How should we approach the problem of health care? We want it to be low-cost, or as low-cost as is possible, and we want high-quality care. Is it possible to have both?
There are two basic ways of addressing health care: a bottom-up, market-based approach and a top-down command-and-control approach.
- A bottom-up approach is based on competition, free markets and economic incentives. It gets the incentives right for all of the individuals in the system, but doesn’t try to predict the final outcome. It tries to free people to achieve what works for the individual.
- The top-down command-and-control version is based on rules and mandates, regulations, fines and penalties to force compliance. It decides in advance how medicine should be practiced, and attempts to impose those results on the doctors, their patients, and on health care suppliers.
- In the top-down command-and-control version large numbers of bureaucrats, who will never contact a doctor or a patient, will decide how medicine should be practiced, and what treatments must be used, and what treatments are too expensive and must be denied or rationed. It depends for its success on a small group of “experts” having all the right answers. It depends for its success on the ability of those in charge to select people who are actually expert, rather than just political appointees.
- A bottom-up approach does not know how medicine should be practiced. Competition will draw out the best practices and best practitioners. It depends for its success on the training, intelligence, creativity and innovative ability of thousands of doctors, nurses, hospital personnel, and from the industry that supplies the health care practitioners.
In the competitive, free-market world 778,000 doctors, 2.6 million registered nurses and thousands of hospital and facilities personnel get up every morning focused on how they can save or improve another life, and keep the costs down — because in a competitive world that is how they succeed.
In the top-down world, that same number of people get up every morning trying to figure out how they can squeeze another dollar out of the third-party reimbursement formulas. Because reimbursement formulas are the major way of saving money, doctors must squeeze more patients into less time.
The thing is we are dealing with human beings, and they just aren’t all the same. In two instances of the same surgical procedure, one patient may be frail, allergic, have other problems; the second , while needing the same procedure, may be otherwise in excellent health. To the command and control bureaucrat the procedure gets the same reimbursement.
“Approximately one in five hospitalized Medicare patients is readmitted for a problem related to the cause of the original surgery. The readmissions are costly and can be life-threatening. The Medicare bureaucrats have decided, on their own, that there are 10 readmission conditions that it won’t pay for, including catheter-associated urinary tract infection and stage III-IV pressure ulcers. This has saved Medicare something less than 1/300 of 1% of all Medicare spending that year.”
Barack Obama’s stated vision of health reform is to find out what works and then go implement it. The Affordable Care Act is making millions of dollars available for pilot programs and demonstration projects. This is misguided. We know what works, the problem is replicating it. There are examples of high-quality low-cost medicine. If everyone went to Intermountain Healthcare in Salt Lake, the nation could reduce its health care spending by one-third, according to studies. If everyone went to the Mayo Clinic , we could reduce spending by one-fourth. But we don’t know how to copy either one and spread it around the country.
This post is derived from John Goodman’s Health Policy Blog at the National Center for Policy Analysis. John Goodman is the “father of health savings accounts,” a money-saving policy that has been extremely popular with both participants and employers. Dr. Goodman is the president and CEO of NCPA , and has been a tireless expert in the campaign to communicate patient-centered alternatives to a government-run health care system. This blog is an excellent source for informed, thoughtful studies on the problems and potential of health care. You can subscribe, as I do.