Two Visions for Health Reform
How can the federal government encourage low-cost, high-quality medical care?
There are basically two approaches: a bottom-up, market-based approach and a top-down command-and-control approach:
- The former is based on competition, markets and economic incentives; the latter is based on rules, regulations, fines and penalties.
- The former gets the economic incentives right for all of the individuals in the system, but does not try to dictate or even predict the final outcome; the latter decides in advance what the end result should look like and tries to free people to achieve it, even if it is not in their self interest to do so.
- The former pleads ignorance about how medicine should be practiced — letting that be determined by competition in the marketplace; the latter decides in advance how medicine should be practiced and tries to impose it from above.
- The former depends for its success on the intelligence, creativity and innovative ability of thousands of doctors, nurses and hospital personnel; the latter depends for its success on a small group of experts having all the right answers.
In the bottom-up world, 778,000 doctors, 2.6 million registered nurses and thousands of hospital and facilities personnel get up every morning and ask themselves, “How can I make costs lower and quality higher today?” In the top-down world, all of those people get up every morning and ask, “How can I squeeze even another dollar out of the third-party reimbursement formulas?”
Of these two approaches, which do you think the Obama administration is following? I’ll give you a minute to decide, then check your answer below the fold…tick,…tick,…tick, …tick,…
Searching for what works: “I’ve Been Everywhere”