The C Word

The C Word

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flying cadeuciiThat we are experiencing a “consumer revolution” in healthcare is a durable meme in the media and in policy circles just now.  When you hear the word “consumer”, it conjures images of someone with a cart and a credit card happily weaving their way through Best Buy. It is, however, a less than useful way of thinking about the patient’s experience in the health system.

A persistent critique of our country’s high cost health system is that because patients are insulated from the cost of care by health insurance, they freely “consume” it without regard to its value, and are absolved of the need to manage their own health.  In effect, this view ascribes our very high health costs to moral failure on the part of patients.

Market-oriented policy advocates believe that if we “empower”patients as consumers by asking them to pay more of the bill, market forces will help us tame the ever rising cost of care. If patients have “skin in the game” when they use the health system and also “transparency” of health providers’ prices and performance, patients can deploy their own dollars more sensibly.

This concept played a major role in the otherwise “progressive” Affordable Care Act. The 13 million people who signed up for coverage this year through the Affordable Care Act’s Health Exchanges opted overwhelmingly for subsidized policies with very high deductibles and out-of-pocket cost limits. The “skin in the game” argument has also heavily influenced corporate health benefits decisions. More than 30 million workers and their families receive high deductible plans through employers.

Being a ‘consumer’ implies the discretionary exercise of purchasing power. This might conceivably make sense for having a baby, or total joint replacement, or cataract surgery, where there are multiple options and a long lead time to choose who to work with. It makes no sense at all for conditions like a stroke, or a cardiac episode, or trauma, where common sense dictates rapid entry into the closest competent care system. There is nothing remotely elective in how a patient or their family responds to these latter problems, and thus, no space for “consumer behavior”.

Being a “consumer” was not remotely descriptive of my recent experience with cancer. Around Christmas time in 2014, I was diagnosed with squamous cell carcinoma of the head and neck. As diagnostic uncertainty narrowed, it was clear that surgery was the remedy of choice for my condition. I ended up choosing my alma mater, the University of Chicago, which had a superb head and neck cancer team, part of a National Cancer Institute-designated Comprehensive Cancer Center. The decision I made was based on trust both in my surgeon and his supporting cast, and on the quality of the rest of Chicago’s head and neck team if surgery was not the definitive end point of care. They did a great job of ridding me of cancer without radiation or chemotherapy.

In deciding what to do about my cancer, there was no rational way for me to evaluate the price/quality dimensions of my alternatives. I knew where to look, and looked –  at Leapfrog, Medicare.gov, Dartmouth Atlas, Yelp, Angie’s List, hospital websites, etc. These sources contained neither price nor outcomes information specific to my condition.  I ended up making my decision based on trust, and on the quality of the multidisciplinary team, not on price or value.

Would I have chosen a cancer program I didn’t know as well because the care was 25% cheaper, or cost me $2000 less out of pocket or even if they had a 5% better cure rate? The short answer is: no. Trust was the issue, not dollars or even “value”. I was not insulated from financial risks either.   Because my Medicare Advantage plan carried an almost $6000 annual out of pocket limit, I had lots of “skin in the game”.

As an anxious patient, I wasn’t trying as a “rational economic actor” to maximize the value of my health benefit. I was trying to survive a potentially fatal illness. My goal was to regain control of my life and resume working. I struggled as best I could to define my clinical risks, and to find clinicians and institutions I trusted to intervene on my behalf to restore me to health.

I experienced the same problem in the fall of 2015 when I needed my left hip replaced, one of those elective surgical procedures that health policy experts commonly cite as having become “commodified”. The same sources I mentioned above were of no use whatever in my making the final decision about where to seek care. After actively seeking “consumer” information, including the newly available ProPublica surgical ratings,  again I made the decision based on trust, and had an exceptional outcome.  Moreover, none of the surgeons I interviewed could tell me what the procedure would cost all in, or even their own revision or complication rates, two things an orthopedic surgeon told me he would try to find out if they were going under the knife.

These difficulties- no time or ability to exercise meaningful choice or lack of useable data upon which to make one- are not the only problems. The biggest problem with the concept is that it is demeaning to patients. It is an economists’ caricature of patients as feckless devourers of a scarce social good which they have no motivation to conserve. In fact, most patients are frightened and in pain, and seeking someone they trust to alleviate both the pain and the fear that accompanies it.

I would love to have had better condition-specific information on the cost and quality of the care choices I face. Bring it on. But ultimately, what we must rely on the professionalism of those who take care of use to protect us in these scary circumstances, something I experienced first hand and on multiple occasions during the past difficult year. It is time to replace this insulting cartoon vision of the patient as a “consumer” with something that more accurately reflects our actual situation.

Jeff Goldsmith is National advisor to Navigant Consulting.

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29 Comments on "The C Word"


Member
Apr 13, 2016

Thanks for sharing your story Jeff. I had no idea about your journey.

As an ‘above average’ consumer and someone who avoids the elective healthcare borg intentionally (I spent way too much time in the belly of the beast, including donning scrubs and frequent OR visitations, lead responsibility for detecting and dealing with suspected ‘impaired physicians’, credentialing, CME and general medical staff management as lay Director of Medical Affairs) I just knew/saw too much about the grand canyon gaps in accountability from Board delegation to medical staff assumption of mission critical hospital operations. I still recall tangling with the culture shift while the Darling and Nork cases informed modern day hospital medical staff liability practices away from the hospital as the ‘doctors MD-iety workshop’ into an ‘integrated enterprise’ more professionally managed.

While we’re not there yet (the separation of church and state, ie., docs and hospitals, respectively, the shift is near as the voluntary medical staff model with docs on commission reaches it end game or point of diminishing returns. With more docs on salary (whether hospitals, medical groups or 3rd generation IPAs), community hospitals, voluntary systems and even some academic medical centers are abandoning the archaic governance model – oft referred to as the ‘three legged wobbly stool’.

Having said that, my resonance with the piece is something I’ve been writing about for a while at ACOwatch.com. In fact, as someone who supported the ACA from the Senate Finance Committee’s markup consideration, to current day (though less so) if it’s legacy is the enshrining of HDHPs (the grand cost shifting charade advocated by health plans that can not manage clinical risk), then it will clearly have failed in intent.

Unfortunately the ‘skin in the game’ narrative is completely bogus and has energized much of the so called ‘innovation’ in the digital health space, delivering more often than not apps or platforms that enable entrepreneurial exits but offer little lasting community benefit or triple aim materiality.

As you know, HDHPs have been around for a while and on a very slow burn in terms of market uptake. Their rate of market share gains has accelerated recently as a result of ACA balancing act considerations, ie, getting the uninsured insured and the need to be at some level ‘budget neutral’ or consistent with long term cost trends and deficit reduction.

The notion of an ’empowered consumer’ or someone who’s health literacy is bolstered by tools, apps or platforms may have enough ‘sex appeal’ to fund and float serial trials in the innovation theater, but in the end offer little to materially move the needle towards, yes, get this, ‘accountable care’.

Thanks for your reporting and good health to you!
Best,
Gregg

Member
Brad F
Apr 12, 2016

Jeff
You mentioned a $6K deductible. Would shopping have mattered? For H&N op and all the additionals, you would have burned through, no–no matter where you chose?

Brad

Member
Jeff Goldsmith
Apr 13, 2016

You are correct, but simply did not factor into decision making. It would’t have if the deductible had been twice that much. It was my physical risk, not my financial risk, that I was trying to manage. Trust trumps dollars.

Member
Apr 14, 2016

Jeff, are you on twitter yet?

Member
Jeff Goldsmith
Apr 17, 2016

“Yet”? My ass. Party over if the boomers are showing up, “right?”
@JeffCGoldsmith

Member
Apr 12, 2016

Without transparency- both in terms of outcomes and costs, “trust” becomes the default position. To assume patients, during a time of fear and anxiety, will stop and figure out value for themselves, is unrealistic. Healthcare, as a business, follows the money. To date, there has been no incentive to publish outcomes or for physicians to understand the “price” of services rendered. There are some medical conditions, often chronic conditions, where helping the patient understand how choices impact their ultimate costs (and risks). However, to put that burden on the public for many conditions is misplaced.

A blue ocean strategy for a healthcare services delivery organization would be to build outcomes and pricing into the organization, make it part of their DNA. We get what we pay for. Transparency should be part of the ask from payers and patients alike.

Member
Apr 14, 2016

Alan one of your colleagues @JordanGrumet posits that absent ‘shared struggle’ (between physician and patient) there is NO intimacy (nor collaboration, ‘compliance’ or dare I say shared decision making).

I’d add, absent intimacy, there is no trust? If no trust (in the therapeutic relationship) knock out the 50% placebo benefit and IMO, not much is left from the ‘intervention’ whether cognitive, procedural or even spiritual. The model of the efficacy of objective, dispassionate (detached) ‘healer’ is basically a myth, no?

Listen here: http://www.blogtalkradio.com/healthtechmedia/2015/12/11/himss-2015-meet-jordan-grumet-md-jordangrumet

A powerful message not remedied by an ‘app’, IMO.

Member
Apr 12, 2016

“Without transparency- both in terms of outcomes and costs, “trust” becomes the default position. To assume patients, during a time of fear and anxiety, will stop and figure out value for themselves, is unrealistic.”
__

Kenneth Arrow, 1963. http://www.bgladd.com/PDF/Arrow1963.pdf

Member

To build on Alan’s comment re “build outcomes and pricing into the organization”: it is a long term system reform that has been and will continue be an ongoing effort….it is happening already with beneficial results. I agree that it is unrealistic to the extent one expects all or even most patients will try to do this ….but the benefits accrue as even a small percentage of payors and patients undertake the effort to get the info and make decisions on the basis of getting outcome and cost information.

Admin
Apr 12, 2016

see #fail above.

Member
rmcnutt
Apr 12, 2016

Actually, perhaps, the idea of “consumer” is incorrect in every meaning of the word regarding medical care.

Member
Allan
Apr 12, 2016

Being a consumer “makes no sense at all for conditions like a stroke, or a cardiac episode, or trauma”. “There is nothing remotely elective ”

That is not entirely correct. With every disease category there is a wide spectrum with regard to being or not being elective. Take your cardiac patient that is taken to the nearest hospital. The ER might admit or send the patient home. If admitted it is done so to stabilize the patient and provide emergency type treatments. Many of the patients do not need the most expensive components of care on an emergency basis and are even sent home to contemplate further treatment, when and where. That provides a significant time frame. Strokes are relatively simple matters and require a few days in the hospital, but the most expensive stuff is what happens after the stroke and whether or not further intervention is performed. Once again there is a significant time frame available.

“Would I have chosen a cancer program I didn’t know as well because the care was 25% cheaper”

Not everyone sees the number one doctor. It would be impossible for one doctor to care for everyone. Even the doctor with the lowest grades in his studies sees patients. Thus we are not talking about you rather the rest of the population that doesn’t feel exactly the same as you do.

Member
rmcnutt
Apr 12, 2016

Jeff, Thank you for your post. I wish you the best with your treatment. As you clearly note, the essence of making a decision is knowing the absolute differences between compared options in disease related outcomes balanced with treatment harms – from the patient’s perspective. Only patients should decide and the trust has to be in ourselves if we want to change the landscape of care. There are no randomized trials to compare primary treatments for head and neck; that alone is important information. Why don’t we have better information about treatments? To make decisions we need to know these things. We can’t have patients involved in choices without that information. Making decisions on costs is wrong approach, in my view. The costs are determined without rationality and there is no measure of the cost/outcome that patients need. People can buy rationally if they know the marginal benefits, but in medical care we have let them down. I don’t know if you know of PDQ NCI, but that is a reasonable source of information for cancer care. The only sites any patient should visit are sites that provide data, not opinions. Your post made our health policy thoughts face reality, and I thank you for that. Bob

Member
Jeff Goldsmith
Apr 12, 2016

Paul,

Did you actually read my post?

What is the point of “ferreting out prices”. Like I said, a 5% or 20% difference in price wouldn’t have caused me to make a different decision about where to seek care. And I did have my own money at risk. Even with the hip replacement, I wasn’t even close to being able to make a “value based” decision and I am about as “inside” this system as you can get.

I was in no position whatsoever to “reduce the prodigious waste” or any of the other things you talk about. And this is from a person who will routinely challenge a tech starting an IV on me or a family member in the Emergency Room and who wrote a book about the imaging business (Sorcerer’s Apprentice) which found that most radiologists believe a third of scans are worthless ass-covering. Neither the “consumer” nor the $100 billion health plan trying to manage this thru call centers and algorithms has a prayer of “ferreting” this stuff out.

My health plan was in no better position to drive toward value or ferret out waste in any of these episodes than I was. They were always a day or two late, and using algorithms to try and catch up. The algorithms approved my decisions to seek care at an academic health center in nanoseconds and didn’t delay the care process by more than five minutes in any of my three clinical encounters. If the health plan had tried helpfully to suggest alternative surgeons based on their algorithms, I would have angrily blown them off.

True enough, I used “inside information” to figure out where to go and who to trust.
Most people trust their physicians or their friends and neighbors. My friends and neighbors run health systems. What do your doctors do when they need care? The same thing: they use “inside information” and try to do exactly what I was trying to do: limit their risk. Maybe that’s the answer: figure out where your doctors go when they need care. I know a lot of academic physicians that do not hesitate to leave their own institutions because they know where the marginal care is.

The idea that most healthcare is, or ought to be, a commodity, has become a religious principle. It is both a waste of energy and a false empiricism. You significantly overestimate how much help transparency will be for health plans or for us in deciding where to go for high risk healthcare, even if we have the data (which we do not).

The real challenge is to restore and strengthen the professionalism in our medical communities and the management of our institutions, our ultimate protection against wasteful or unsafe healthcare.

Member

Jeff,
If I were facing a life threatening illness and I knew my docs were among the best in the nation I too would say “go for it”….price/cost would not be an issue for me….but yours is not the typical situation.

I am just saying that to use your experience as a basis to dismiss reform that gives patients transparency and power to allocate their dollars is unfortunate. And that to call for more professionalism as the bromide is simplistic. And yes, I did read your piece….and I sought to give a serious reply.
Paul

Member
Jeff Goldsmith
Apr 12, 2016

Paul, I was a REAL patient scrambling to avoid being killed. I had very little real power. The powerlessness made me angry and the anger didn’t help me get to a solution. I totally wasn’t sure where to turn, and relied upon my long time primary care physician to decide where to go.

Calling for more professionalism isn’t a “bromide”; it is about all that actually protects us. The idea that “transparency” would have helped me in my situation is, in my view, the health policy equivalent of laetrile.

Member

Good post. Here are some counter points.

1. The fact that it is often difficult or impossible to ferret out prices doesn’t mean it is a bad idea to have price transparency.

2. The call for “trust” of providers is fine, but it encourages complacency or fatalism in getting visibility into medical procedure pricing….which almost all observers view as pretty well screwed up.

3. Advocates for price transparency and the value of “skin in the game” are hardly demeaning to patients…they think patients (and bureaucrats and employers) would all benefit…by making better value choices where the huge (unsustainable) health care dollars are going…..not to mention reducing the prodigous waste in the system.

4. It is great you had trust on your chosen doctors/hospital…and that your trust was based on knowledge…and that it was well placed and worked out well. Unfortunately the vast majority of patients/consumers are not in such a position. Unfortunately the take away from your piece for the majority of patients/consumers is “trust”…..not wise for most of us in most circumstances.

5. Hospital/health system pricing is a massive web of cross subsidization…where high revenue and high dollar services fund all kinds of things….subsidize “social good” programs, building projects, acquisitions, administrative staff etc. In many regions of the country these systems operate in a monopoly or oligarchic situation (a single dominant entity runs the health system).

6. The old argument that in an emergency patients can’t shop: of course, but more price transparency would allow our agents….the insurers….to do better up front negotiation of prices from high quality emergency procedures…and constrain health care systems from using these events to pile up charges.

7.. Patient “skin in the game” is not alone going to fix the mess, but it is a helpful piece…and patients in employer high deductible plans make the choice to go into the plans and like them (unlike the coercion that marks the ridiculously high deductibles in many ACA plans).

Member
Apr 11, 2016

No doubt, we have a long ways to go but for the scenarios you outlined, I’ve seen 3 things make a dent.
1. Value-based primary care: Until we have a true consumer-friendly hc market, proper primary care is one of the valuable things we have. In many ways, the next generation primary care do a great job of protecting an individual against the uncoordinated and often out-of-control system. See more at http://www.rosetium.com/blog/2016/2/15/health-rosetta-value-based-primary-care
2. Concierge-style customer service: increasingly employers recognize that having an advocate for employees is a true value add for the employee but also helps the bottomline. Most people have little knowledge of the system and how to use it well. See more at http://www.rosetium.com/blog/2016/3/7/health-rosetta-concierge-style-employee-customer-service
3. Transparent medical market: In geographies where it’s available, it solves the most vexing problem in healthcare (pricing failure). It’s a win for providers. It’s a win for employers. It’s a win for employees. It started in orthopedics but has extended to imaging, lab test, complex surgical procedures and even some chronic care management. It makes wise decisions free or near-free and poor decisions expensive. See more at http://www.rosetium.com/blog/2016/2/14/health-rosetta-transparent-medical-network

Much more needs to be done but this is what I’ve observed works the best and I’ve put my family where my mouth is and have seen a massive improvement over the status quo.

Member
Apr 14, 2016

Dave, you may want to re-connect (?) post Hello Health with Jay Parkinson, as the Sherpaa Health model has major upside IMJ. A blend of Iora, One Medical and retainer medicine (not fond of the ‘Concierge’ opportunists). Having built global PMPM and Percent of Premium contracts for a large commercial and Medicare Advantage PCP driven IPA, I can say Jay et al are on the right track. Matt masterfully engages Jay in this one: https://vimeo.com/162633178

When will we get that interview in the can? Where next? ATA 2016, HD Palooza, ???

Member
Apr 11, 2016

It sounds like a contradiction — healthcare as a commodity. Truly bizarre thinking.

When my 92-year old mother’s chest x-ray revealed a large inoperable tumor I knew at once she would be a hospice patient. She had been in a fine skilled nursing facility nearly two years, getting superior care, and I figured hospice simply meant a change of protocol — pain meds, etc. Up to then she was in good health. She was ambulatory and only took a small aspirin an a vitamin daily — no other prescriptions.

The nursing home wanted to know *which* hospice we would be using! Silly me. I had no idea it would be yet another layer of who-know-what. They said they did business with five different ones, so I said just pick one. Who knew? As far as I could tell it was just another journal entry for Medicaid, but no skin off my nose and no harm done.

Selecting among five hospice providers is far less dramatic than the choices facing Dr. Goldsmith, but it’s yet another illustration of an unnecessary and costly redundancy in the systems we have. (Not to mention that royal flushes such as these are virtually non-existent in rural areas as well as less-affluent parts of sprawling metroplexes. #FollowTheMoney

Member
Apr 11, 2016

Good post.

We act like this stuff is news. See Kenneth Arrow, 1963. “Uncertainty and the Welfare Economics of Medical Care.” http://www.bgladd.com/PDF/Arrow1963.pdf. A Nobel pedigree’d neoliberal, no less.

Moreover, the slightest bit of digging produces some — ahem, shall we say inconvenient — Hayek:

“There is no reason why in a society which has reached the general level of wealth which ours has attained …. [T]here can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody. … Nor is there any reason why the state should not assist the individual 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. There are many points of detail where those wishing to preserve the competitive system and those wishing to supercede it by something different will disagree on the details of such schemes; and it is possible under the name of social insurance to introduce measures which tend to make competition more or less ineffective. But there is no incompatability in principle between the state’s providing greater security in this way and the preservation of individual freedom.

“To the same category belongs also the increase of security through the state’s rendering assistance to the victims of such ‘acts of God’ as earthquakes and floods. Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make provision for the consequences, such communal action should undoubtedly be taken…” [from “The Road to Serfdom”]

See also Elhauge’s 31 years’ post-Arrow incisive 1994 “Allocating health care morally.” (Google it; I don’t want to get stuck in TCHB’s links moderation.)

Member
Apr 14, 2016

Wow Bobby, from Hayek of all peeps! Seems inconsistent with the ‘Road to Serfdom’ narrative and advisories against the rise of a nanny state. Kinda surprised to see his advocacy of the social insurance angle if not mandate.

And yes, not much new here in the health policy domain. From PSROs to HSAs (not the funding vehicle),to HMOs, PPOs and OWAs to present day ACOs, PCMH and the growing litany of acronyms continues to enable our cathedrals of medicine, embedded high priests, including their (physical and cultural) moats and silos of separation. One day, we will burn down the mission, but we ain’t there yet.

Member
Allan
Apr 12, 2016

Bobby, it seems you are recalling a discussion on THCB quite awhile back and it is true that Hayek discussed the state and healthcare, but he adds several important features. One is that any interference should have the least possible interference with the marketplace and two he warned against what he called the second kind of security which was created to protect individuals or groups from a decline in their income.

I am not entirely sure what version of Hayek you utilized in quoting him. Can you provide the http?

Member
Apr 12, 2016

Well, y’know, “The Road to Serfdom,” the book. Page 125.

George Routledge & Sons
2 Park Square, Milton Park, Abingdon, OX14 4RN
270 Madison Avenue, New York, NY 10016
Reprinted 2001, 2002, 2003, 2004, 2006
Routledge is an imprint ofthe Taylor CJ( Francis Group, an informa business
© 1944 F. A. Hayek

Member
Allan
Apr 13, 2016

Good because that means you would have read the entirety of Chapter 9 Security and Freedom. Thank you for the exact citation. Since this book was written so long ago it can now be obtained in pdf form on the net for free for anyone else or for you in case you spent a lot of time copying it from the actual book. There are many copies of the book that are altered or condensed, but Rutledge to my knowledge was the original publisher in 1944. Had you quoted the paragraph just before the one quoted you would have noted Hayek’s feeling towards the marketplaces even in the instances where many would be advancing the notion that security was required. He breaks that security down into two types. One he agrees with and one he doesn’t. Throughout this book and all his writing he was not advocating the destruction of the free market to enhance security and certainly not what I think you are trying to promote with the use of his name. He was promoting free marketplace thinking.

These additional paragraphs using your your words: “ ahem, shall we say inconvenient — Hayek:”

To get that edition on line in pdf form one can can google “ the road to serfdom George Routledge & Sons “ and then find the pdf.

As far as Arrow’s uncertainty is concerned, whatever uncertainty existed at the time is antiquated today and if viewed in that exact manner should be looked at as somewhat unsophisticated considering the revolution in information technology that has occurred since then. Additionally though Arrow’s distortions are important to consider they occur everywhere and the problems created have been solved with minimal or no government intervention.

Member
Apr 13, 2016

I have the entire 1944 PDF copy. I quoted what he said about health care, that’s all. He said what he said.

I also quote Kenneth Arrow in extensive detail on my current blog post.

Member
Allan
Apr 13, 2016

I didn’t mean to infer that Hayek didn’t say the exact words you transcribed. He did. I just wanted to emphasize that he said more so that one reading those words didn’t get confused and think he felt that the marketplace could be abandoned in healthcare.

Member
Apr 13, 2016

Ah, the “out of context” argument. Yes, yes…

Moreover, show me where I’ve EVER written that the private marketplace “could be abandoned in healthcare.”

to wit, from my essay about my late daughter:

“Finally, with respect to Dr. James’ Wall Street Journal quip, the capitalist imperatives within which health care clinicians must operate are, in the aggregate, neither of their making nor under their control. Moreover, blanket indictment of the profit motive as necessarily inimical to optimum medical care and research is a rather simplistic notion. Strategies aimed at maximizing investors’ net returns probably spur at least as many medical advances as they inhibit.”

http://regionalextensioncenter.blogspot.com/2013/11/one-in-three.html

How about a bit of 2005 American Enterprise Institute medical economist JD Kleinke:

“If the state of U.S. medical technology is one of our great national treasures, then the state of U.S. HIT is one of our great national disgraces. We spend $1.6 trillion a year on health care—far more than we do on personal financial services—and yet we have a twenty-first-century financial information infrastructure and a nineteenth-century health information infrastructure. Given what is at stake, health care should be the most IT-enabled of all our industries, not one of the least. Nonetheless, the “technologies” used to collect, manage, and distribute most of our medical information remain the pen, paper, telephone,fax, and Post-It note. Meanwhile, thousands of small organizations chew around the edges of the problem, spending hundreds of millions of dollars per year on proprietary clinical IT products that barely work and do not talk to each other. Health care organizations do not relish the problem, most vilify it, many are spending vast sums on proprietary products that do not coalesce into a systemwide solution, and the investment community has poured nearly a half-trillion dollars into failed HIT ventures that once claimed to be that solution. Nonetheless, no single health care organization or HIT venture has attained anything close to the critical mass necessary to effect such a fix. This is the textbook definition of a market failure…

All but the most zealous free-market ideologues recognize that some markets simply do not work. Indeed, reasoned free-market champions often deconstruct specific market failures to elucidate normal market functioning. The most obvious examples of such failures (such as public transit and the arts) are subsidized by society at large because such subsidies yield benefits to the public that outweigh their costs. Economists refer to these net benefits as “positive externalities,” defined as effects that cannot be captured through the economic equation of direct cost and benefit…”

Dot-Gov: Market Failure And The Creation Of A National Health Information Technology System, JD Kleinke, Health Affairs, 2005 (pdf)

“Indeed, reasoned free-market champions often deconstruct specific market failures to elucidate normal market functioning.”

See Kenneth J. Arrow, December 1963.

Member
Allan
Apr 14, 2016

Bobby, I wasn’t criticizing what you wrote just above. It is important to note that security was a factor incorporated into Hayek’s thinking. As I said, you quoted correctly so my response was not a correction of you rather a broadening of what Hayek said. You didn’t say the private marketplace “could be abandoned”, but others I think on this blog in the past assumed that is what Hayek meant so I tried to prevent that assumption by providing a link. Hayek believed in the free marketplace, but he also understood security and delineated his feelings on that issue in his books. Too much desire for security interferes with one’s liberty.

I’m not sure where you are going with your quotes so I will make my personal position clear. I believe in free markets even in the health care sector which I consider different than other markets just like other markets are different from each other. However, I recognize certain basic needs that may not be met with a totally free market. Therefore I support subsidies to those in need though I believe those subsidies best arise from governments more local than the federal government. That, however, doesn’t mean that the federal government cannot play a part.