Pro and cons of competition in health care essay
– read the attached article
– write pros free market in heath care in 1 paragraph
– 1 paragraph for cons of free market in heath care
– 1 paragraph to choose your side, for example it is good to have free market in health care or bad to have free market.
– Then conclude the essay.
– please cite atleast one journal article or newspaper article.
– Total 350-500 words
25/01/2018 Do Markets Work in Health Care? – The New York Times
https://www.nytimes.com/2017/01/13/opinion/do-markets-work-in-health-care.html 1/4
Opinion | OP-ED COLUMNIST
Do Markets Work in Health Care?
David Brooks JAN. 13, 2017
Believe it or not, we’re not really going to have to spend the next four years wading through wonky drudgery of
Russian spy dossiers and hotel sex cameras. At some point we’re going to have a thrilling debate over the most
scintillating question in health care policy.
The Republicans are going to try to replace Obamacare. They’re probably going to agree to cover everybody
Obama covered, thus essentially granting the Democratic point that health care is a right. But they are going to try to
do it using more market-friendly mechanisms.
As you know, the American health care system is not like a normal market. When you make most health care
decisions you don’t get much information on comparative cost and quality; the personal bill you get is only vaguely
https://www.nytimes.com/
https://www.nytimes.com/pages/opinion/index.html
https://www.nytimes.com/column/david-brooks
25/01/2018 Do Markets Work in Health Care? – The New York Times
https://www.nytimes.com/2017/01/13/opinion/do-markets-work-in-health-care.html 2/4
related to the services; the expense is often determined by how many procedures are done, not whether the problem
is fixed.
You wouldn’t buy a phone this way.
The Republicans are going to try to introduce more normal market incentives into the process. They are probably
going to rely on refundable tax credits and health savings accounts so everybody can afford to shop for their own
insurance and care.
This would still be nothing like a free-market system — it would still be a highly regulated, largely public benefit
— but it would rely more on consumer incentives.
The crucial question is: Do market incentives work in health care?
This is really two questions. The economic one: Would market mechanisms improve quality and reduce costs?
The psychological one: Do people want the extra cognitive burden of shopping for health care, or would they rather
offload those decisions to someone else?
Most progressives say markets don’t work. They point back to a famous essay the economist Kenneth Arrow
wrote in 1963, which is the same year the Beach Boys had a huge hit with “Surfer Girl.”
Arrow argued that there are several features that make health care unlike normal markets. People’s needs for
health care are unpredictable, unlike food and clothing. The doctor-patient relationship is unique and demands a
high level of trust, empathy and care. Providers know much more about medicine than patients do, so the
information is hopelessly asymmetric. Patients on a gurney can’t really make normal choices, and payment comes
after care, not before.
http://www.who.int/bulletin/volumes/82/2/PHCBP
25/01/2018 Do Markets Work in Health Care? – The New York Times
https://www.nytimes.com/2017/01/13/opinion/do-markets-work-in-health-care.html 3/4
These are all solid points, especially the doctor-patient one. But health care has become less exceptional over
time. The internet and other mechanisms help customers acquire a lot more information. Sophisticated modeling
helps with unpredictability in a bunch of fields.
We put our lives in the hands of for-profit companies all the time. I spent part of my week learning from an
aviation mechanic how hard manufacturers work to prevent pieces of metal from shredding through the cabin if an
engine explodes. Airplanes are ridiculously safe.
Proponents of market-based health care rely less on theory and more on data. The most fair-minded review of
the evidence I’ve read comes from a McKinsey report written by Penelope Dash and David Meredith. They noted that
sometimes market forces lead to worse outcomes, but “we have been most struck by health systems in which provider
competition, managed effectively, has improved outcomes and patient choice significantly, while at the same time
reducing system costs.”
There’s much research to suggest that people are able to behave like intelligent health care consumers. Work by
Amitabh Chandra of Harvard and others found higher-performing hospitals do gain greater market share over time.
People know quality and flock to it.
Furthermore, health care providers work hard to keep up with the competitors. When one provider becomes
more productive, the neighboring ones tend to as well.
There are plenty of examples where market competition has improved health care delivery. The Medicare Part D
program, passed under President George W. Bush, created competition around drug benefits. The program has
provided coverage for millions while coming in at 57 percent under the cost of what the Congressional Budget Office
initially projected. A study of Indiana’s health savings accounts found the state’s expenses were reduced by 11 percent.
http://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/when-and-how-provider-competition-can-improve-health-care-delivery
https://hbr.org/2016/12/research-perhaps-market-forces-do-work-in-health-care-after-all
http://www.heritage.org/research/reports/2013/12/compelling-evidence-makes-the-case-for-a-market-driven-health-care-system
http://www.heritage.org/research/reports/2013/12/compelling-evidence-makes-the-case-for-a-market-driven-health-care-system
25/01/2018 Do Markets Work in Health Care? – The New York Times
https://www.nytimes.com/2017/01/13/opinion/do-markets-work-in-health-care.html 4/4
Laser eye surgery produces more patient satisfaction than any other surgery. But it’s generally not covered by
insurance, so it’s a free market. Twenty years ago it cost about $2,200 per eye. Now I see ads starting at $250 an eye.
There’s a big chunk of evidence that market incentives would work in health care, especially in non-acute care.
The harder problem for Republicans may be political. This is a harried society. People may not want the added
burdens of making health care decisions on top of all the others. This is a distrustful society. People may not trust
themselves or others to make decisions. This is an insecure society. People may not want what they perceive as
another risk factor in their lives.
The policy case for the Republican plans is solid. Will they persuade in this psychological environment? I doubt
it.
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A version of this op-ed appears in print on January 13, 2017, on Page A27 of the New York edition with the headline: Do Markets Work in Health
Care?.
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