Ten Things Everyone Should Read About Health Care

Ben Domenech, editor of the indispensable morning newsletter, The Transom, has published an excellent “top ten” list, which we are happy to reprint with his permission. 

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[From The Transom, September 10, 2012.]

There is so much to read these days about health care policy and entitlement reform. But we oftentimes lose sight of the longer term debate about these matters, instead focusing on the arguments dictated by the framework of an election cycle and partisan political lines. Suddenly Republican-leaning writers all have very strong opinions about the workability of competitive bidding despite having no interest in it a month ago, while otherwise intelligent Democratic-leaning writers compose complex apologetics structures for IPAB and the individual mandate. Politics often warps policy debates, but this is a particularly egregious case. So let’s step back for a moment and assess things in terms of the past thirty years or so instead of the past two with a list of essays, books, and other items which make up the Ten Things Everyone Should Read About Health Care. I’ve tried to keep things from getting too dry with this list, but you can tell me if I’ve failed.
1. Milton Friedman: “How to Cure Health Care”, The Public Interest, Winter 2001. http://vlt.tc/ght  “The tax exemption of employer-provided medical care has two different effects, both of which raise health costs. First, it leads employees to rely on their employer, rather than themselves, to make arrangements for medical care. Yet employees are likely to do a better job of monitoring medical care providers—because it is in their own interest—than is the employer or the insurance company or companies designated by the employer. Second, it leads employees to take a larger fraction of their total remuneration in the form of medical care than they would if spending on medical care had the same tax status as other expenditures.”
2. Max Gammon: “Health and security: report on the public provision for medical care in Great Britain”, St. Michael’s, 1976. http://vlt.tc/ghu  Origin of “the theory of bureaucratic displacement.” “In a bureaucratic system, an increase in expenditure will be matched by a fall in production. Such systems act rather like ‘black holes’ in the economic universe, simultaneously sucking in resources and shrinking in terms of ‘emitted production’.” More on Gammon in this report. http://vlt.tc/ghv
3. H.E. Frech, ed.: “Health Care in America: The Political Economy of Hospitals and Health Insurance”, Pacific Research Institute, 1988. http://vlt.tc/ghx  Just about everything you could ever need to know concerning the monopsony power of hospital systems and insurers. Additional literature is here.http://vlt.tc/ghw
4. Joseph Bast, Richard Rue, and Stuart Wesbury, Jr.: “Why We Spend Too Much on Health Care”, Heartland Institute, 1992. http://vlt.tc/gi0  “By first bidding up the price of health care with a payment system that encouraged excessive utilization and spending, and then imposing cost-containment measures that led to cost-shifting, government inadvertently increased the cost of health care to other buyers and changed the way care is delivered. In so doing, government has contributed to a process that has priced health care and insurance out of the reach of millions of Americans. Medicare and Medicaid have given the elderly and poor greater access to health care. However, this benefit must be weighed against the costs borne by taxpayers and other health care consumers.”
5. Richard Epstein, “Mortal Peril,” Basic Books, 2000. http://vlt.tc/gi1  Epstein concentrates on the moral and philosophical case against the false promise universal coverage and in favor of a more modest and more private safety net—but his main thrust is against the idea of health care as a natural human right.
6. John C. Goodman, Gerald L. Musgrave, Devon M. Herrick: “Lives at Risk: Single-Payer National Health Insurance Around the World”, Rowman & Littlefield, 2004. http://vlt.tc/gi2 Not just an ideological tract, but an examination of single payer’s failures in a tangible sense, offering an alternative view of how to achieve better quality patient-centered care.
7. Regina Herzlinger, “Who Killed Health Care?: America’s $2 Trillion Medical Problem – and the Consumer-Driven Cure”, McGraw-Hill, 2007.http://vlt.tc/gi3  From an interview about the book: http://vlt.tc/gi4  Herzlinger describes “an iron triangle” of “hospitals, the insurers, and the government” protecting a broken system: “The insurers would love for a private health insurance system to remain. I, too, think that’s very important, but the easy way for it to remain is to offer just one product. If you offer a lot of products, suddenly you’re in actuary land. You’re in a real risky business. So they’ve done a lot to maintain just one product. Hospitals want to control the health care delivery system, and they’ve become oligopolists or monopolists in many markets, thus obviating price and quality competition, and they’ve become vertically integrated by hiring physicians and using them. Initially the hospital was a place almost like a hotel or an office, a kind of ancillary place for the doctor. The doctor was the star. But increasingly, the hospitals have won the power struggle, and the physicians are more or less the blue-collar workers. And then the government. Whether Democrat or Republican, power is seductive, and they are actually practicing medicine … by micromanaging the payment system.”
8. David Goldhill, “How American Health Care Killed my Father”, The Atlantic, 2009. http://vlt.tc/gi5  “To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy. We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy.”
9. Avik S.A. Roy, “Health Care and the Profit Motive”, National Affairs, 2010.http://vlt.tc/cf5  “To those on the left, America’s health-care system is a heartless capitalist jungle: a place where the bottom line is king, and the working poor are exploited. President Obama, for example, has accused insurance companies of holding Americans hostage in exchange for profits, and doctors of cashing in on children’s sore throats by needlessly removing their tonsils. The right, meanwhile, sees American health care as an outpost of socialism: The government distorts prices and suppresses innovation, impairing the quality and affordability of care and constraining individual autonomy. Hence Republicans’ call for less government involvement in insurance, and their complaints that heavy-handed Medicare rules are the source of our woes. Simply put, liberals believe that health care is treated as a market commodity today but should not be, and conservatives think that health care is not treated as a market commodity but should be.”
10. John C. Goodman, “Priceless” and “Patient Power”, 1993 and 2012. A slight cheat here, as these are two books, but really work as a pair across two decades of work. The old: http://vlt.tc/gi7  The new: http://vlt.tc/gi6  The first chapter of Goodman’s latest is available to read here. http://vlt.tc/gi8 

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