Friday, April 16, 2010

Health Care Fix

The number one cause of rising health care costs is the disconnect between those who pay and those who make the choices. Those selecting want the best possible health care... for good reason. As long as they aren't involved in any cost/benefit tradeoff, they will scream for the best care. They'll game the system in an infinite number of clever ways.

We have an enormous amount of innovation going on in medicine today, with extremely good results. The innovation is on quality without concern for cost. Imagine if half of that innovation was going into taking the current technology and cost-reducing it. You'd see something like what happens in other areas of technology like computers. Costs would constantly be falling while quality would constantly be rising.

The expectation for flawless medical care is also causing costs to rise due to defensive medicine and to a less direct impact, malpractice insurance.

The worst thing you can do is to have the government attempt to control medical care. This creates an even greater disconnect between those who pay and those who make choices. In the end, you'll get rationing based on political choices, and the costs will still go up due to inefficiencies and graft.

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