Tag: John Goodman

Government Failure

I can’t even count the number of articles and blog posts I’ve seen asserting that markets can’t work in health care.  Or that they work very imperfectly.  Or that they suffer from serious “market failure.”  In every case, the writer just assumes that government can remedy these problems.

Yet when Gerry Musgrave and I wrote Patient Power, we concluded that our most serious health care problems stem from bad government policies, rather than from markets failing to work.  In other words, “government failure” not “market failure” is the source of most of what is going wrong.

Why is our perspective so different from so many other health policy analysts?  I think the answer is:  the vast majority of people in health policy do not understand the concept of “government failure.” For example, health economist Austen Frakt, following Nobel Laureate Joe Stiglitz produced a list of “market failures” in health care and in health insurance at his blog recently. These include imperfect competition, unequal access to information, external costs and benefits for others generated by private activities, etc. He then offered this observation:

In principle, government intervention can increase that benefit (economic welfare) in such cases.  In practice and in some cases, it’s debatable.

How does Austin know that government “in principle” can solve these problems without a model of government decision making?  He can’t.  Moreover, it turns out that many of the factors alleged to cause “market failure” also contribute to “government failure.” In fact, in the political sphere their impact is much worse. Here is the bottom line: There is no model of government decision making in health care (and in most other areas as well) that shows that government will reliably improve upon the market. (At least a real market.)Continue reading…

The HMO in Your Future

I have not been able to determine how you pronounce the acronym for Accountable Care Organization (ACO). Is it ā´ ko? Or ā´ so? Or ăh so´, as in Charlie Chan movies? What about ĕ´ ko, as in a canyon? Or simply ick, with a silent o?

Anyway, this is not a trivial matter because you are likely to be in an ACO at some point in the future and it’s probably going to happen sooner than you think.

In Massachusetts, stakeholders are already meeting to develop a plan to push everyone with commercial insurance into an ACO. [Can you guess who doesn’t count as a “stakeholder?” If you live in Massachusetts and you weren’t invited to the meeting, that’s a clue.] Nationwide, Medicare will start paying fees to ACOs, beginning next year. Eventually, the Obama administration would like to see everyone in an ACO.

But if no one had any previous interest in forming ACOs, let alone joining them, what is going to cause us all to change our minds? Money. Insurers won’t be able to get premium increases unless they adopt ACO plans. Doctors and hospitals will be paid less if they don’t join. Eventually doctors will find they are ineligible to treat Medicare patients or patients insured in the newly-created health insurance exchanges if they are not practicing in ACOs. As for the patients, there won’t be any plans to join other than ACO plans.Continue reading…

Op-Ed: Defending Regi

Matt you can’t have it both ways.

First you attack a well-known Harvard professor, Regina Herzlinger, for accepting an invitation to become a director at a company that only later was publicly accused of accounting problems. Then you denigrate her when she goes public with her attempts to get the board to move more aggressively to tackle those problems and ruffles the feathers of several board members who retaliate. You then insinuate that she profited while shareholders suffered and yet you dismiss it as sour grapes when she resigns before her term ends (costing her a significant sum of money in the process).

And while we’re at it, how can a site with the name “The Health Care Blog” routinely ignore the ideas of one of the most creative thinkers in health policy? This field is so completely dominated by unoriginal thinking; I don’t know why you don’t welcome with open arms someone who is not just parroting the latest fad.

And speaking of character, we have just been through a period when an embarrassingly large number of leading health policy analysts sold their souls, their self-respect, their reputations and whatever is left of their intellectual honesty to the highest bidders in what we loosely call “health care reform.” In the midst of all that, I would think that someone also has shown the unimpeachable rectitude and character Professor Herzlinger has is deserving of a THCB award.

John C. Goodman, PhD, is president and CEO of the National Center for Policy Analysis.  He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system. Dr. Goodman’s Health Policy Blog is considered among the top conservative health care blogs on the internet where pro-free enterprise, private sector solutions to health care problems are discussed by top health policy experts from all sides of the political spectrum.


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