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Weekend must-read (2)





Leslie Michelson: Doctor to the 1% (and Maybe Someday to You), WSJ. Excellent discussion of how true healthcare innovation can only happen as the result of market-based incentives, and never from a top-down regulatory approach. Some excerpts:

In a world in which 98% of the conversations are about cost containment, it's a joy ... to have somebody who's focused on enhancing quality only.

... the health-care delivery system, to the extent it qualifies as a system, "has no quality control, no integration, no coordination." Doctors "tend to operate in an independent and isolated way, and even specialists who've been treating the same patient for years and years typically never, ever speak to one another."

Since businesses are the customers [in the current system], not the individuals who change jobs every three years on average, insurers "act rationally" and don't invest in services with "short-term costs and long-term payback." ... the better option is for businesses to convert to cash vouchers so their workers can buy portable policies. Right now, there is "no meaningful information about the quality of care, virtually no information about price, and no sensitivity to price," but that would change if the insurance industry built "an enduring relationship with consumers ... "

... why, circa 2012, should HR departments be selecting and administering one or two or three plans for a thousand or a hundred thousand workers and their dependents? You don't need a Ph.D. in economics to understand that you will guarantee suboptimization."

Universal coverage is never as universal as its proponents want it to be, and it usually results in a double- or triple-tier system as the upper-middle classes flee. Then the medical ethicists condemn the disparities based on ability to pay that their own programs helped to create.

... if your aspiration is to provide everyone the highest quality of care, then you have precluded yourself from providing anyone with the highest quality of care. As an economic, structural, societal matter, it's impossible to achieve.

"Innovations such as ours have to start at the high end, because you have to figure out how to do it. And then you figure out how to systemize it and take the costs down and deliver to the mass market."

Americans ... are "extremely good at buying things." But they don't know how to buy health care ... . "The entire engine of American consumerism is missing in health care. What a preposterous thing."

The last two sentences are the most powerful. And by the way, the guy who is doing this is a Democrat.

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