Arnold Kling  

Recommended Reading on Health Care

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Tyler Cowen recommends an article that interviews health information technology CEO Jonathan Bush. I concur in the recommendation. Read the whole thing.

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The author at Emergent Order in a related article titled An article worth reading writes:
    Thanks to Arnold Kling and Tyler Cowen for the link to a rather intresting article on the men of system(scroll down to VI.II.42) who do not understand that order can emerge in the health care industry without their palsyed hand.... [Tracked on December 14, 2009 10:52 AM]
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spencer writes:

This article made me think of one of the big questions I have about the health care system.

You believe that the problem is government. I can not prove you wrong, but I suspect there are other problems as well.

Most products we buy are provided by large scale corporations that create large economies of scale and much lower costs. Pure Adam Smith's pin factory thinking.

But the overwhelming bulk of health care is provided by small partnerships and other small firms like hospitals. So outside of the production of drugs the system get few benefits of scale and specialization of labor. Rather we have thousands of very small individual partnerships of doctors where each faces the same inefficiencies and none have sufficient scale to really address them. Most hospitals, especially the non-profits essentially have the same problem.

This all implies that one of the major reasons that health care is so inefficient and so expensive is that the providers all approximate the economists perfectly competitive model of the firms where no one firm has the power to influence the market and consequently no one firm has the power to experiment and work at a scale sufficient to improve productivity and reduce costs in the way large corporations do in almost every other economic sector.

I know this model is completely contrary to your biases and way of looking at the world, but I suspect it is just as relevant as your tendency to always find some way to blame government.

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