The same terrific series of disaggregations that brought us amazingly cheap DVD players, computers, and automobiles has been progressing for some time in the health care industry. Instead of a single physician interacting with a single patient, health care is now an industry with middlemen, specialists in providing ancillary services, large specialized hospitals, and similar ecological niches. Instead of prices falling, however, health care costs continue to rise (as measured in constant dollars). Why is that one benefit of disaggregation missing?
I deliberately left discussions of health care out of the book; I'm working on an essay or two on the subject. But I can't ignore a terrific quote in today's Wall Street Journal that explains a great deal about what's wrong with health care in the US today:
"Republican delusions that health care can work like any other market apparently know no bounds," says Robert Berenson, a senior fellow at the Urban Institute and a top Medicare administrator under President Clinton. "They now even extend their notions of an ownership society to people in their last months of life."And it's not that Berenson is right — it's that he's so completely wrong. Berenson and his ilk attempt to aggregate all authority about health care decisions, costs, and resources into Federal and state agencies. The more they succeed in aggregating authority, the higher prices rise. Fighting disaggregation means that you lose the benefits it would bring, and the cost reductions we'd ordinarily expect to see are missing in action.
Topics: · health+care
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