Conservatives love market solutions, but healthcare has no hope of ever being an “efficient market." Here's why.
September 8, 2009 -- The September issue of The Atlantic has a feature article by David Goldhill, a business executive who lost his father due to a hospital error. Goldhill’s analysis of what’s wrong with the quality of our healthcare is impeccable, but not his solution.
This executive advocates an even more market-based health system relying on personal savings for low-probability, but costly care. He believes informed consumers who spend their own money will demand better quality, and providers who fail the test will be dumped —part of the skin in the game theory.
A guest editorial in the Portland Business Journal (Aug. 28) talks about how a public option would threaten healthcare reform. Its author, Mary Grealy, is president of the Healthcare Leadership Council in Washington D.C., which represents CEOs of healthcare companies.
Grealy cites, among other things, the “innovation gap” between Medicare and the private sector. Her example: It’s taken the government 40 years to offer prescription drug coverage to seniors. But Grealy doesn’t mention the failure of private insurers to deal with the unfettered prescription drug prices or the role of industry lobbyists who first delayed a drug benefit, and then prevented Medicare from negotiating prices for drugs.
A market that effectively manages quality, prices and services must be an efficient market. Anyone who invests in the stock market should be familiar with this term. Stock markets that work correctly are efficient because the same information is available to everyone, and the market rewards good performance evidenced by rising stock prices, when a company’s profits increase because of better products and services.
Without significant regulatory reform, our healthcare system has no realistic hope of ever becoming an efficient market because we don’t have an unbiased way of comparing the value or the cost of specific medical procedures, devices or pharmaceuticals – and sharing that information with consumers.
Dr. James Weinstein, a surgeon who left a prestigious position at the University of Iowa to join the fight for better health policy at The Dartmouth Atlas Project, asserts that we don’t have informed consent for medical procedures. What we have is “informed persuasion” -- one-sided information, with a bare minimum of down-side discussion of the risks and failures to please the lawyers—but we don’t fully inform the patient.
The research speaks for itself. When consumers were given thorough and well-balanced information about a surgical procedure, they chose surgery 25 percent less often, according to Dr. Donald Berwick of the Institute for Healthcare Improvement. I’ve reviewed the patient information that Berwick cites, and it is a world away from current informed consent information. It’s what all patients should see.
Yet the market has been reluctant to follow Berwick’s lead, and we constantly hear from experts who give biased information online and in other media. This kind of a market will never be “efficient” nor lead to the best care.
An hour-long video by Maggie Mahar based on her book -- Money-Driven Medicine -- was featured on Bill Moyers’ Journal (Aug. 28). Mahar described how hospitals advertise their high-tech, high cost marquee services -- cardiac catheterization labs, fancy imaging facilities and cancer centers. Yet these same hospitals fail to mention the medical or cost downsides.
Pharmaceutical manufacturers use the most egregious advertising practices, telling consumers to “ask their doctor,” who must either write the prescription or spend a lot of unreimbursed time explaining why a certain drug is not the best choice for them.
A public option, accompanied by better regulation of health care advertising, comparative effectiveness research, and widespread use of balanced and thorough information to consumers, is an absolute must. Only then can we begin to create a more efficient market and make better medical decisions.
Unfortunately, for many of the market advocates it’s entirely about their own personal economies. Given the tremendous unmet health needs in our society, their arguments are almost devoid of ethical values.
It’s time for our leaders to do the right thing – to take a courageous stand for all of us – and demand a public option as an essential component of healthcare reform.
Dr. Thieman is an experienced board-certified family physician and a medical director with long experience in both medical practice and health plan leadership.
For Thieman's earlier commentary on the influence of money on the insurance industry click here.