Cars and Healthcare
If you buy a car this month, an article by Sholnn Freeman in the Washington Post today suggests that it will NOT be an American car. A local Chrysler salesman blamed Comsumer Reports for not recommending American cars. David Champion of Consumer Reports countered that he wasn’t impressed with the new cars from Chrysler. J.D. Power and Associates is quoted as saying U.S. automakers have improved the quality of their vehicles, but they haven’t done so consistently. In other words, every once in awhile they get it right, but it’s an accident.
Now, suppose we were talking about healthcare instead of automobiles. And we might be comparing Community Hospital A with Community Hospital B instead of Chrysler and Honda. But that conversation would only take place if Americans had the same power to choose healthcare providers that they now have to choose automobiles.
A letter also in today’s Washington Post makes a similar point by comparing healthcare to restaurants. John Graham argues that “the system needs more choice, not more coercion.” Of course, choice presumes information. It’s easy to compare automobiles--features, cost, reliability, etc.--try doing that with hospitals. Some information is becoming available (www.hospitalcompare.hhs.gov, www.cms.hhs.gov/hospitalqualityInits/25_hospitalcompare.asp, www.jcaho.org, www.consumeraffairs.com/news04/2005/hospital_compare.html, ) but it’s minimal and doesn’t include cost data. Also, hospitals typically charge uninsured patients twice what insurance companies pay for the same service.
All of this would disappear with price competition for individual healthcare services. And if you’ll look back at the definition of efficiency, efficiency would improve as prices come down--without any change in the basic service provided. As a next step, providers would look at their internal processes to improve efficiency in order to be able to compete more effectively. Universal health insurance would offer no motivation to improve efficiency or to reduce prices.
