Jan

3

David Goodhill gave an interesting talk at the Junto last night based on his book "Catastrophic Care: how American Healthcare Killed my Father and How We Could Fix It." He pointed out that cost controls don't work, that costs are skyrocketing to 15% of GNP versus 5 % 50 years ago, that the ACA won't neccessarily increase the number of insured, that there is no relation between the amount spent on health care and life expectancy, that numerous excess costs, excess treatments, errors in doctors treatments, and inadequacies and inefficiencies in the insurance that people buy and other problems that occur in our medical system.

He had many solutions that at the margin would remedy some of these problems, including competition in say 5% of the treatments like they have in Singapore. He was upset that many patients receive treatments and prescriptions that statistical studies say have costs much higher than the benefits, especially in states with many doctors. Statins and colonoscopies were pointed to as very guilty and excessive remedies and procedures, and he had many quillets and quiddities in his presentation that had a quasi economic ring to them, like "why is it that in states that have a disproportionate number of docs that the costs aren't lower— this violates the law of supply and demand." He is also upset that hospitals make so many errors compared to other professions, 1 in 140 for non-contagious treatments, and he seemed to have no understanding of decision making under uncertainty and the necessity of making errors in areas of changing dynamic information and alternative treatments that are possible.

Regrettably, he missed the forest for the trees. He had no understanding that the basic problem is the monopoly nature of the medical system. Things like the licensing of Drs, the restrictions on treatments, the unholy alliance between the FDA and the drug companies and hospitals, the lack of competition between drs, and hundred of other violations of how the free market and competition has been abolished that are covered in such seminal articles as Reuben Kessel's on Price Discrimination and Monopoly in the medical profession.

All the problems that he found were guaranteed to happen. Friedman proposed a solution in Capitalism and Freedom starting with the abolition of licensing of drs, and the restrictions on starting hospitals, and the treatments allowed by the various regulatory agencies. In general David Goodhill served as what might be classified as somewhat between the "your own man" says that what we need is just a little more regulations and the useful idiot Rand quant type study that is a honey net for criticism by the opposition.

Here is a good article that teaches some good economics while explaining what's going on in health care. 


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