| One question : just how would you prioritize actions to turn heathcare into a real market, or as close to it as possible ? I would go for: 1) full price transparency 2) making price discrimination illegal 3) attacking the information asymmetry by providing a free, subsidized first line triage Whether treatment is taken or the patient decides to do without it, making sure tests and diagnosis are performed could help proper self regulation of consumption It could also be made as a public service since it seems very close to a natural monopoly (due to the subadditivity of the cost function - see for ex http://www.clt.astate.edu/crbrown/eleven1.htm - having big labs to process blood test gives economy of scales but require high fixed costs) It could therefore be politically defensible on grounds of efficient pricing (ie pricing at the marginal cost, which requires subsidizing for natural monopolies since average cost are above marginal costs), to avoid deadweight loss. The first line triage could then provide full price transparency (diagnosis -> probabilistic DRG), from which the patient could either decide to "wait and see", or to browse a catalog of hospital offering services (DRG -> prices) knowing the price paid would be no different with or without insurance. At that point, it might be possible to remove all price caps and floors, and let the market work. So basically, we could get a working market on the treatment side. Traditional monopoly and oligopoly management (watching the HHI before allowing fusions) could then keep it that way. I'm a bit out of idea however to have integral pure and perfect competition, at least until we get user-operable "all-in-one diagnosis devices" (like Star Trek tricoders) to remove the information asymmetry. My last rants on this topic were posted on
http://news.ycombinator.com/item?id=5261137 |