Wednesday, September 9, 2009

The Freakonomics of Health Care

I heard an interview last night on NPR of a woman in her twenties who had battled and won against cancer.

Her story was interesting because she was so young. And, because of how she chose to go about being treated for her disease.

She worked in the U.S. and had insurance provided by her employer. However, she was a citizen of the Czech Republic.

She started her treatment in the U.S. In short order, she was overwhelmed by the paperwork and confusing information she was receiving from the various providers: doctors, labs, insurance companies, hospitals, etc.

So overwhelmed that she decided to return to the Czech Republic for her treatment.

She described her treatment there as being the same or better treatment as she would have received in the U.S. With the added benefits of no paperwork and no cost.

She said that she received some very effective new drugs that helped destroy her tumors. Those drugs are not readily available in the U.S. because they are incredibly expensive and insurance companies have not agreed to cover their use yet.

She did say that the treatment in the Czech Republic was not as warm and friendly as health care in the U.S. She said the doctors and nurses were cold and mechanical in going about their business. Medical personnel there did not spend alot time with patients and families discussing treatment and the emotional issues that a disease like cancer brings.

Freakonomics is a book that if you haven't read, you need to.

Steven Levitt is an economics professor at the University of Chicago. He believes that incentives are the cornerstone of modern life. Economics is the study of incentives.

So, what are the incentives for all the players in the medical industry in the U.S.?

And, what are the incentives for all the players in the medical industry in a country with socialized medicine?

Levitt postulates there are three kinds of incentives. Economic, social and moral.

We should be focused on debating those incentives as relates to health care. We are discussing treatment before we have discovered the underlying disease.

The free market medical system works. But it has problems. Like too much paperwork. And insurance companies deciding treatment plans based on costs.

The socialized medical system works. But it has problems. Impersonal. Waiting times. Questions about quality of care due to lack of economic incentives.

How do we in America incentify all the players so that the end result is the best health care on earth?

The free market system had better figure this out, or the government is going to do it. And government thinking is generally not sound, freakonomically.

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