Medicine and the Free Market

When I see an article titled Medicine and the Free Market in the National Review New Republic I expect to see another article full of lame justifications for the current "medical industrial complex". Much to my surprise I find this article by Arnold S. Relman that starts out like this:

During the past four decades our health policies have failed to meet national needs because they have been heavily influenced by the delusion that medical care is essentially a business. This delusion stubbornly persists, and current proposals for a more "consumer-driven" health system are likely to make our predicament even worse. I wish to examine these proposals and to explain why I think they are fundamentally flawed. A different kind of approach could solve our problems, but it would mean a major reform of the entire system, not only the way it is financed and insured, but also how physicians are organized in practice and how they are paid. Since such a reform would threaten the financial interests of investors, insurers, and many vendors and providers of health services, the short-term political prospects for such reform are not very good. But I am convinced that a complete overhaul is inevitable, because in the long run nothing else is likely to work.

He goes on to explain that until the mid 60's medical care was not industrialized, the hospitals were all not for profit and medical insurance was rare. That all changed in the mid 60's with the introduction of Medicare and the large scale dependence on medical insurance.

This is a very long article, 20 printed pages, but well worth the time to read. Mr Relman explains why the current system doesn't work and why things will only get worse until we can admit that medicine can't be treated like a business. He is not optimistic that's going to happen anytime soon because too much money is being made by members of the "medical industrial complex". He discusses the latest proposed solution, "consumer driven health care", and tells us why it will only make things worse.

A real solution to our crisis will not be found until the public, the medical profession, and the government reject the prevailing delusion that health care is best left to market forces. Kenneth Arrow had it right in 1963 when he said that we need to depend on "non-market" mechanisms to make our health care system work properly. Once it is acknowledged that the market is inherently unable to deliver the kind of health care system we need, we can begin to develop the "nonmarket" arrangements for the system we want. This time the medical profession and the public it is supposed to serve will have to be involved in the effort. It will be difficult, but it will not be impossible.

If you are interested in this important subject take the time to read this article.