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Sun Jul 26 15:43:02 BST 2009

July 25, 2009, 5:07 PM PAUL KRUGMAN
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, which demonstrated — decisively, I and many others believe —  
that health care can’t be marketed like bread or TVs. Let me offer my  
own version of Arrow’s argument.

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 tells you right away that health care can’t be sold like bread.  
It must be largely paid for by some kind of insurance. And this in  
turn means that someone other than the patient ends up making  
decisions about what to buy. Consumer choice is nonsense when it comes  
to health care. And you can’t just trust insurance companies either —  
they’re not in business for their health, or yours.

This problem is made worse by the fact that actually paying for your  
health care is a loss from an insurers’ point of view — they actually  
refer to it as “medical costs.” This means both that insurers try to  
deny as many claims as possible, and that they try to avoid covering  
people who are actually likely to need care. Both of these strategies  
use a lot of resources, which is why private insurance has much higher  
administrative costs than single-payer systems. And since there’s a  
widespread sense that our fellow citizens should get the care we need  
— not everyone agrees, but most do — this means that private insurance  
basically spends a lot of money on socially destructive activities.

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.

All of this doesn’t necessarily mean that socialized medicine, or even  
single-payer, is the only way to go. There are a number of successful  
health-care systems, at least as measured by pretty good care much  
cheaper than here, and they are quite different from each other. There  
are, however, no examples of successful health care based on the  
principles of the free market, for one simple reason: in health care,  
the free market just doesn’t work. And people who say that the market  
is the answer are flying in the face of both theory and overwhelming  
evidence.

"If the difference is that the bureaucrat standing between me and my  
doctor is not more interested in maximizing profits to company  
shareholders than in my health outcome, FINE!"

— SKV
On Jul 26, 2009, at 8:35 AM, Gross, Ronald wrote:

> Part of the problem is that President Obama has focused the  
> 'numbers' debate for the medical field on making money, not  
> providing universal quality of care when he said (as best as I can  
> remember and paraphrase) that a doctor would, for example, do a  
> tonsillectomy rather then treat the tonsillitis because it pays  
> more.  That was as poor a choice of words as saying that the  
> Cambridge police acted 'stupidly'; regardless of your politics, one  
> must admit that both those statements pulled the attention of most  
> Americans away from the central issues - the disease, if you will -   
> and focused them on the symptoms.
>
> Ken is so right in that the key here will now be for the AMA, the  
> ACS and ALL OF US to become very politically active, and make our  
> voices heard by our elected officials so that the true scope of the  
> issues get heard, explained, understood and dealt with appropriately.
>
> Just my 2 cents (a far cry from the trillion thing!),
> Ron
>
> -----Original Message-----
> From: trauma-list-bounces at trauma.org [mailto:trauma-list-bounces at trauma.org 
> ] On Behalf Of kmattox at aol.com
> Sent: Saturday, July 25, 2009 8:28 AM
> To: Trauma-List [TRAUMA.ORG]
> Subject: Re: BRAVO to the ACS
>
> NeitHer do most Americans.   This is why ACS, AMa and others - YOU  
> must be iNvolved.    The bill in coNgress is about shift in power  
> and control not reform in your health system.
> Sent via BlackBerry by AT&T
>
> -----Original Message-----
> From: Sanjay Gupta <sanjaygupta99_91 at yahoo.com>
>
> Date: Sat, 25 Jul 2009 03:41:36
> To: Trauma-List [TRAUMA.ORG]<trauma-list at trauma.org>
> Subject: RE: BRAVO to the ACS
>
>
>
> If the Government is asking for another 1 trillion dollars (that is  
> one million times one million dollars), how the Federal Program is  
> saving money is difficult for me to understand.  Well - I am just a  
> docotor, I do not understand numbers.
>
>
> Sanjay Gupta
>
>
>
>
>
> --- On Fri, 7/24/09, McSwain, Norman E Jr. <nmcswai at tulane.edu> wrote:
>
>> From: McSwain, Norman E Jr. <nmcswai at tulane.edu>
>> Subject: RE: BRAVO to the ACS
>> To: "Trauma-List [TRAUMA.ORG]" <trauma-list at trauma.org>
>> Date: Friday, July 24, 2009, 7:43 PM
>> The change is welcome
>>
>> Norman
>>
>> Norman McSwain MD
>> Trauma Director, Charity Hospital
>> Professor of Surgery, Tulane University
>> New Orleans LA
>> 504 988 5111
>> norman.mcswain at tulane.edu
>> <mailto:norman.mcswain at tulane.edu>
>>
>>
>> ________________________________
>>
>> From: trauma-list-bounces at trauma.org
>> on behalf of KMATTOX at aol.com
>> Sent: Fri 7/24/2009 8:17 PM
>> To: trauma-list at trauma.org
>> Subject: Re: BRAVO to the ACS
>>
>>
>>
>> Still under discussion.   This was enabling
>> not funding  legislation.
>> Contact our congresspersons.    It  is the
>> Principle here that is important.
>> This is a pivital point in  health care
>> reform.   Up to this point the
>> objective has not been  health care reform, but a
>> shift from private medicine to
>> federalized funding and  control.   As
>> of TODAY, with this leadership,
>> there has been a shift  in FOCUS NATIONAL, led by the
>> ACS and the AMA to do what
>> is best for patients,  for quality, for access, and
>> then address the
>> funding.    There  is already sufficient
>> funding in the existing 3 trillion/year
>> expenditures in  hard money and in kind contributions
>> to do what everyone
>> desires.   It  is the governance that
>> is the debate, and as of today it is
>> being defined by  over riding governing principles,
>> not partisan politics for
>> power and  control.
>>
>> k
>>
>>
>>
>>
>>
>> In a message dated 7/24/2009 8:13:37 P.M. Central Standard
>> Time,
>> nmcswai at tulane.edu
>> writes:
>>
>> Ken
>> Is funding for uncompensated patient care included?
>> Is  the Emergency Care Coordination Center funded?
>>
>>
>> Norman
>>
>> Norman  McSwain MD
>> Trauma Director, Charity Hospital
>> Professor of Surgery,  Tulane University
>> New Orleans LA
>> 504 988  5111
>> norman.mcswain at tulane.edu
>> <mailto:norman.mcswain at tulane.edu>
>>
>>
>> ________________________________
>>
>> From:  trauma-list-bounces at trauma.org
>> on behalf of KMATTOX at aol.com
>> Sent: Fri  7/24/2009 7:40 PM
>> To: trauma-list at trauma.org
>> Cc: brittld at evms.edu;
>> Redstart at aol.com;
>> KMATTOX at aol.com
>> Subject: BRAVO to the  ACS
>>
>>
>>
>> The ACS sent this news brief out this afternoon - WELL
>> DONE  -  I  recommend
>> that Medical Disaster Response be added to this  and
>> maybe even add
>> something about Acute Care Surgery
>>
>> k
>>
>> HOUSE COMMITTEE APPROVES  LANGUAGE ENSURING ACCESS
>> TO  TRAUMA CARE
>>
>> On July 20, the House Energy and Commerce Committee
>> approved  an amendment
>> to H.R. 3200, America's Affordable Health  Choices Act
>> of 2009,  which would
>> expand patient access to emergency  and trauma care.
>> The approved
>> amendment,
>> which was still being  reviewed by the College's
>> congressional affairs
>> staff at press time, would  regionalize emergency care
>> and shore up the
>> nation's
>> trauma centers. The  new language also calls for
>> authorizing the
>> establishment of  an  Emergency Care Coordination
>> Center, which would serve
>> as a
>> centralized  hub  for all urgent care. As noted
>> previously in ACS
>> NewsScope, the
>> regionalization and trauma center language was also
>> included in the  health
>> care  reform legislation that the Senate Health,
>> Education,  Labor, and
>> Pensions
>> Committee approved earlier this month. For more
>> information, contact
>> kmcdonald at facs.org
>> .
>>
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BRAVO to the ACS