2009-11-30

If Health Care Was More Like Flat-Screen TV's

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We'd apparently all be getting treated in France:



Now don't get me wrong, I am just as much for the profit motive as the next guy, but the question I keep coming back to is simply why is the United States health care system so expensive?

I mean $116,796k for a bypass operation here vs. $11,916 in France? Really? Are we 10x's better at it than the Frogs?

If so, great!

Well I certainly don't know the answer, but if you're interested in finding out more, here's the CEO of Kaiser Permanente attempt at answering this very question in a recent interview with the Washington Post.

Part I

(Highlights include, "Why do we need private insurance companies?" "Do we have a competitive market in the US?" "Why is the US system the most expensive?")

Part II

(Highlights include, "Do you believe that the problem is 'fee-for-service'?" "How will electronic medical records affect the delivery system?")


Favorite exchange:

A number of the organizations that are considered the best and most cost-efficient in the United States – Kaiser, Mayo, the Veteran’s Health Administration – are integrated at a level that’s really quite rare. Normally, you’d expect that to give them a competitive advantage, and they’d eventually take over the market. But that doesn’t seem to happen. Why?

Well, the VA has its own population. When you look at the Mayos of the world, they’re doing well. They have a good business model that’s working for them. But everyone else has a good business model that’s working for them, too. There are $2.5 trillion in this market. There’s no reason, if you have a comfortable cash flow, why would you do hard things and heavy lifting to get to a different model? That’s one reason I’ve been such a strong proponent of exchanges. I believe we need a truly competitive market for insurance.

Great stuff!

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