Why markets can’t cure healthcare

[foginthemorn]

Relying on the markets for the cure is what the WH and congress are doing--at the expense of our pocketbooks --and our health.


July 25, 2009, 5:07 pm
Why markets can’t cure healthcare

Judging both from comments on this blog and from some of my mail, a significant number of Americans believe that the answer to our health care problems — indeed, the only answer — is to rely on the free market. Quite a few seem to believe that this view reflects the lessons of economic theory.

Not so. One of the most influential economic papers of the postwar era was Kenneth Arrow’s Uncertainty and the welfare economics of health care,...................

There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care — but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor’s office; and very, very few people can afford to pay major medical costs out of pocket..................

This problem is made worse by the fact...................

The second thing about health care is that it’s complicated, and you can’t rely on experience or comparison shopping. (”I hear they’ve got a real deal on stents over at St. Mary’s!”) That’s why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners.

You could rely on a health maintenance organization to make the hard choices and do the cost management, and to some extent we do. But HMOs have been highly limited in their ability to achieve cost-effectiveness because people don’t trust them — they’re profit-making institutions, and your treatment is their cost.

Between those two factors, health care just doesn’t work as a standard market story...........

http://krugman.blogs.nytimes.com/2009/07/25/why-markets-cant-cure-healthcare/

[izquierdista]

1. The idolaters won't be happy

The free-market idolaters won't like to hear this. The people for whom the first commandment reads "There is the free market, thou shall not have any other economics before thee".

[foginthemorn]

2. and every

indication is that they have won. I do believe some type of bill will pass--and it will be controlled by the insurers.

[backscatter712]

3. Most of us already know this, but it's good to hear from the Nobel-Prize-winning economist. K&R