He concludes as follows:
‘There are….no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn’t work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.’
Of course, blogging doesn’t lend itself to the kind of thoughtful analysis the topic deserves, but the DMCB respectfully disagrees with the Liberal Conscience using both theory and evidence. It turns out insurers, thanks to their claims data, are very able to discern which hospitals are offering the best value for heart attack care as well as many other big ticket emergency health care items. It’s worked so well that Medicare is adopting the practice That is the basis for many insurers recognizing Centers of Excellence, how Medicare is able to deny payment for conditions acquired in the hospital and how the researchers at Dartmouth can compare the value of services provided in Florida versus Minnesota.
As for the reputation for denying claims, the DMCB notes there are many heart breaking anecdotes of persons being really screwed by their insurer. This has given the industry a huge public relations problem. However, Professor Krugman is using an unnecessarily broad brush that uses multiple anecdotes to paint a trend. The truth is that State insurance departments are closely involved in the day-to-day monitoring of health plans, that consumers generally have access to expedited appeal mechanisms if they feel coverage is being unjustly denied and that without a credible administrative infrastructure, fraud and abuse will go to Medicare levels.
The folks at Safeway would argue markets do work if only Dr. Krugman and his allies and their would look at the real evidence and get out of their way.