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Economist, Doctor Disagree on Best Way to Improve Health Care's Quality, Costs
USA Today
January 09, 2009
If doctors competed more for patients, many of the problems of rising health care costs and inconsistent quality would be solved, according to a research report released Wednesday by a local health economist.
Doctors typically do not disclose prices prior to treatment because they do not compete for patients on price, said Devon Herrick, health economist with the National Center for Policy Analysis based in Dallas.
Payments are usually not made by patients themselves, but by employers, insurance companies or the government.
To prove his point in the report, Herrick juxtaposed the health care industry with the market for cosmetic and laser eye surgery.
Competition is holding prices in check for such elective procedures, he said, because patients are paying with their own money and have more incentive to shop for the best prices.
“When providers do not compete on price, they usually don’t compete on quality either,” Herrick said. “The reason is that providers do not receive any reward for higher quality.”
But what about physicians who practice because of a calling and have a personal commitment to offer the best quality to every patient at all times?
“There are some people like that, but I’m an economist, and I tend to see things from people having a self-interest,” Herrick said. “Many think it’s a calling, but as an economist I’m interested in getting the incentives right.”
The problem with Herrick’s dregulated free-market approach to health care is that recent examples of the crumbling financial sector prove it doesn’t work, said Dr. Jerry Frankel, a Plano-based urologist.
“I know him well and respect him tremendously,” Frankel said.
“But the economy has collapsed. We know that everything needs regulation, from rabbis to doctors.”
Frankel suggests having patients covered by nonprofit health insurance and creating price controls on drugs to fix the nation’s core health care problems. He said he’s also in favor of quality care report cards for physicians.
Herrick’s research is one of many periodic policy reports from the NCPA, a think tank in North Dallas that focuses on private alternatives to government regulation.
The report’s sources include government data, independent research, books and newspaper articles.
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