Wednesday, April 29, 2009

Real economics of quality health care

Paul McBride, VP at Wellpoint (and my brother!), speaks here about health care at the Milken Instistute Global Conference (he's third from the left on the panel).  He says the core problem is that as a society we've been too concerned about the incentives of producers while we largely absolve consumers of their responsibility.  I couldn't agree more.  

I would also add that medicine is probably doomed to inefficiency in this country and around the world.  The main problem is that cost-benefit analysis has very real limits when applied to life and death issues.  What's the price of life?  This is a moral question more than an economic question.  Hence, we have the hippocratic oath, the inability to let go of granny, the need to show that we care and that our care does not depend on price, and a good deal of religious belief in the power of medicine.  Yes, we can make progress on certain margins, such as breaking up the AMA's monopoly of labor supply, but overall it's a tough row to hoe.  Good luck, brother.

Addendum: The LA Times wrote a piece about it, particularly discussing how health care tourism is going mainstream.  A bunch of commenters think this is somehow unjust.  These are my comments:

It's called competition. It highlights how non-competitive the medical industry in the US has become. Blame the AMA, and their government enablers, for limiting the supply of doctors. Blame the FDA for limiting the supply of drugs. Don't blame capitalism, or competition.

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