Innovation in Health Care

Reason's Ronald Bailey had an interesting article about what a market for health care would look like. I think they leaned far too much on profit incentive in their arguments as usual - most physicians are not out to make a buck. However, taking the profit motive out actually strengthens their argument. Currently, we have a medical system that is enabled and fostered by excessive regulation and price-fixing. The system is driven by entities that do not have patient health in mind; insurance companies are highly profit-driven, and government agencies are driven by the two-headed monster of bureaucratic stagnation and get-re-elected corruption. These evils sit between the physician and patient, sucking 30% off the top of care in the form of "overhead" and "Medicare contributions," respectively.

Most doctors want to make enough to cover expenses and live comfortably, like the rest of us, but they also overwhelmingly like to help people. Look at veterinary care: prices are reasonable and care is accessible, despite similar education costs to medical school. So, profit motive or not, doctors left to their own devices and left with their own decisions weighing budget and care will make the best possible decisions for their clients.

But the comment I found the most was near the end of the post:

Prostate cancer patients can evaluate and choose between options like watchful waiting, various radiation therapies, surgery, and soon, a new biotech immunological treatment. Information gathering would take no more time than the current wait for a follow up appointment.

Finally, one would expect that competition would spark that virtuous cycle in which innovation progressively drives down costs, just as it has in so many other areas of commerce. Medical care would become ever more affordable and thus reduce the perceived need for government intervention on behalf of the poor.

My father is an avid skier, and the almost-inevitable occured back in the early 1990's: he blew out his ACL and meniscus in the bumps on Sunday River's White Heat. After consults with physicians, he realized his choices:
  1. Physical therapy to strengthen the muscles around the knee, which would allow ambulatory movement but would mean that strenuous exercise would slowly destroy his knee.
  2. A painful and costly operation that was only partly covered, which involved cutting an incision along the knee, flipping the knee cap, cutting a piece from the patellar tendon, and grafting it into the ACL spot. This would be followed by several months in a lower-body cast and extremely painful healing of a wound that was prone to infection.
Those were the obvious choices at least. But my father read up on some procedures that his orthopedist referred him to, and found that there was a technique called "arthroscopic" surgery that was coming along in a few years. It wasn't covered yet, but all he had to do was wait. He opted for #1. He kept up his skiing and took up biking to keep the leg muscles strong. His knee popped out on a regular basis, until in 1997 he could stand it no longer and got the surgery.

But by May 1997 that surgery was a fraction the cost it was when he first got hurt. What's more, the practitioners had started to clean up other damage while they were in the knee - so they could essentially fix whatever damage he had done to his cartilage by playing on it for those years. They also were trying out various options for new ACLs, so instead of needing the graft harvested from his body, meaning another surgery wound, he got a cadaver's ACL. The surgery was so unintrusive that he literally watched it as it went on, because local anesthesia was sufficient. He was out of bed by weeks end on crutches, and he was on skis again by November with the help of physical therapy. He had missed one epic July 4th weekend in Tuckerman Ravine.

That level of innovation is what is possible in a market-based health care system. Those surgeries were perfected on rich people and professional athletes, out of pocket. Arthroscopic knee surgery began in earnest in the early 1980's, part of a long line of experimentation - mostly failures or ambivalent outcomes. I simply cannot see such a technique becoming affordable and common in a decade or two under a single-payer system of medicine. What government board does not shut it down after failures of silk, carbon, goretex, and about 10 different types of harvested connective tissue?

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