The Healthcare industry, or medical-industrial complex, wears the armor of Government-sponsored protectionism; chinked together by pieces of the tax code, The McCarren-Ferguson Act, Certificate of Need laws, Medicare billing regulations, HIPAA, HITECH, and the ACA.
You would be hard pressed to find a more entrenched, impenetrable cartel.
You can take this to the bank. Every innovation in the production of every good or service – anything that lowers costs or increases quality – originates on the supply side of the market. There has never been a successful innovation that originated on the demand side.
This principle applies to health care in spades. For as long as I have been in health policy – more than 30 years – I have been dealing with non-doctors who have a deep, abiding desire to tell doctors what to do. Yet I don’t know of any example anywhere in the world where this approach has ever worked.
If the definition of insanity is repeating the same thing over and over again and each time expecting a different result then “insanity” is the appropriate word here. The Obama administration has spent millions of dollars on pilot programs and demonstration projects in a fruitless attempt to discover how to better practice medicine. It has spent millions more trying to herd Medicare patients into Accountable Care Organizations – super HMOs with financial incentives to hit quality measures. That hasn’t worked either.
Here are some data suggesting that health spending increases are, as theory suggests, difficult for the public sector to control. If true, a long run strategy that seeks to control expenditures by increasing the fraction of health spending under government control is more likely to increase expenditures than reduce them.
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