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Where the Medical Markets Actually Work

by John Goodman

John Goodman is the president of the National Center for Policy Analysis

So what are you really saying, John? What are those
marvelous supply-side innovations you hint at?

— Uwe Reinhardt, Commenting on “Reforms that Don’t Work

Critics of the U.S. health care system complain that price and quality data are not transparent; care often is fragmented and uncoordinated; best practices often are not followed; time and money are wasted on procedures of questionable value; preventive care and patient education are underutilized; such common communication vehicles as the telephone and e-mail are rarely used; and electronic medical records and error-reducing software are not part of normal practice.

But why are these things happening? Is it the doctors who are at fault? Or is it the third-party payer system (which, ironically, the AMA helped put in place) that is to blame? An NCPA study by Devon Herrick finds that, where patients pay directly for all or most of their care, providers almost always compete on the basis of price and quality. And because they are not trapped in a system that pays for predetermined tasks at predetermined rates, providers are free to repackage and reprice their services — just like vendors in other markets. It is primarily in these direct-pay markets that entrepreneurs are solving the very problems about which the critics complain. In fact, these solutions are usually a necessary part of the entrepreneur’s business model.

1 Comment »

  crystalbutterfly wrote @ January 29th, 2009 at 4:50 am

another option is to make use of the ever growing www.surgicalbliss.com" rel="nofollow">medical tourism industry.

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