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Did this man see the invisible hand in THIS market

Did this man see the invisible hand in THIS market

I had dinner with a prominent (at least to my way of thinking) local attorney the other night and we got to talking about whether increased competition could be used to bring about changes in healthcare which would lead to lower costs. I have to admit that I don’t see us being able to introduce significant competition because of the following characteristics of the healthcare system:

1) People tend to make poor choices under stress

2) Physicians have the power advantage over patients

3) While there is occasionally one right answer to a health care problem (evidence based medicine), there are often several right answers, each of which has an implication to the patient and to society

I decided to look tonight for evidence other than my gut instinct regarding competition and found that Robert Wood Johnson had done some work regarding this. In a series of interviews, leaders in healthcare delivery were asked their opinions regarding several aspects of health care delivery included the prospect for introducing competition. In 2004, the respondents had several pertinent observations reflecting more system based thinking:

1) The system is incredibly inefficient because of a maldistribution of resources and patient preferences that are not “rational” in the market sense. Additionally, providers have combined their resources and reduced excess capacity from the system, further reducing competition

2) Integrated delivery systems never emerged in most markets

3) Employers were unwilling to enforce efficienct utilization of resources for thir employees

4) Health plans did not seek out opportunities to be competitive

It turns out that in the same way that Mobilians wanted discount airlines to come to Mobile to force Delta to lower rates, Alabamians want more efficient healthcare to come to Blue Cross without having to use the competition. That approach has not worked here, yet. As of today it looks like the White House may look towards methods other than the federal government to provide such competition.