Competing models of health care

The two competing economic models of health care are greatly influencing the debate on the future of health care in the US. One, hewing closely to the free-market standard, calls for consumer-driven decisions, free markets open to all investors in facilities, technology, and insurance. The other views health care as a unique good, one in which unfettered competition will never work and wherein market-based competition will lead to unacceptable social consequences. The latter model typically calls for more regulation and tighter controls.
An excellent perspective on this debate was brought to my attention by Peter Rousmaniere, a wise man and good friend. Steven Pearlstein of the Washington Post has written a great synopsis of the debate, one that is well worth considering. Using CMS Administrator Mark McClellan’s recent decision (or more accurately non-decision) on the licensing of ambulatory surgery centers (he decided to procrastinate) as his foil, Pearlstein frames the issues quite succinctly.
“When they are vilifying insurers and managed-care companies, physicians like to present themselves as Dr. Welby — selfless professionals whose medical judgments would never, ever be colored by their financial interests. But in lining up behind physician ownership of specialty hospitals, the doctors essentially acknowledge that they are just like the rest of us, their behavior swayed by even modest financial incentives.
You can’t have it both ways. And the way the people would have it is to pay their doctors well, put them in the central decision-making role in the health care system — and then demand that they give up the right to invest in MRI machines or specialty hospitals or get incentive payments from drug companies.”
Leaving aside Pearlstein’s claim to know what the people want, his arguments about physicians are on point.
However, I believe his analysis, excellent as far as it goes, misses a critical point. In all his discussion, and the national debate for that matter, on costs, process measures, outcomes, motivations, consumer-directed v. regulated, price controls and the like, there is no mention of the output.
I fail to see how an economic debate can serve any useful purpose if it does not consider what individuals or societies get for their expenditure. Think back over the last many years, and all the arguments you have heard and/or participated in, all the columns and studies and analyses and debates. Has anyone ever said, “well, we need to spend $X because it will increase the population’s productivity/functionality/quality by Y%, and that is a better return on investment than my opponent’s recommendation.”
Hell no.
This makes me nuts. The entire health care debate is almost useless, because we are arguing about process, about inputs with no appreciation for outputs and economic good.
Until and unless we engage in a debate about what health care should deliver, we are wasting time, words, intellectual capital, and newsprint.