Should We Regulate Prices of Hospitals? All-payer Rate Setting’s Allure

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Image credit: time.com

The Bitter Pill article has received a lot of press lately. People reading it have often turned to a simple solution: regulate prices. The most straightforward approach to this is called “all-payer rate setting,” which has been experimented with before in some places in the U.S. and is still used in Maryland. The basic idea is that the government says, “When any provider performs this certain service, he/she will be paid this much for it no matter who the payer is.” And they set prices for every single service. Think of how this would instantly make all chargemasters a thing of the past. And no more worrying about hospitals increasing their bargaining power as they join together to form ACOs. And all that administrative complexity that would be gone (thus decreasing costs a fair amount)!

But there are downsides, too, which are not as obvious and may lead people to jump on the bandwagon of all-payer rate setting ignorantly. First, back to basics:

Total spending on healthcare = price * quantity

Yes, we probably have some quantity problems (running too many scans, etc., which regional variation literature attests to quite thoroughly), but the main reason we spend so much more than other countries is because of the prices. So, here’s the prices equation:

Price = Cost + Profit

What’s making prices too high? Brill makes a strong case that, at least in a lot of hospitals, profit is part of the problem [Update: Turns out most hospitals lose money on average, so it’s not as big of a deal as we thought]. But what about costs? Is the actual cost of care too high as well? YES, costs are the major problem, as shown by looking at the average profitability of healthcare organizations. More evidence of this: even in countries that do a pretty good job minimizing unnecessary services and regulating profits to reasonable levels, healthcare spending growth is still unsustainable, which only leaves cost as the primary culprit. Therefore, any policy (whether it’s meant to regulate profits, improve access, improve quality, or whatever) that creates barriers to cost lowering should be reserved as a last resort.

So, would all-payer rate setting create a barrier to cost lowering? If yes, I don’t like it. If no, let’s consider it.

First, since I’m reading The Wealth of Nations lately, let’s ask Adam Smith what he thinks about the subject:

I shall conclude this long chapter with observing, that though anciently it was usual to rate wages, first by general laws extending over the whole kingdom, and afterwards by particular orders of the justices of peace in every particular county, both these practices have now gone entirely into disuse.

By the experience of above four hundred years [says Doctor Burn] it seems time to lay aside all endeavours to bring under strict regulations, what in its own nature seems incapable of minute limitation: for if all persons in the same kind of work were to receive equal wages, there would be no emulation, and no room left for industry or ingenuity.

Particular acts of parliament, however, still attempt sometimes to regulate wages in particular trades and in particular places. (Emphasis added)

What’s he trying to say? All-payer rate setting would leave “no room left for [cost-lowering] industry and ingenuity”? (If you’d like to see my explanation for why I assume innovations by providers are generally cost-lowering, see here.)

I’ve explained before how taking away the freedom to set your own prices also removes much of the rewards for cost-lowering industry and ingenuity. In short (and simplified), lowering costs without sacrificing quality means you can lower prices more than others and therefore offer higher value than others, and higher value will eventually be rewarded with market share and profits. (Another assumption I’m making: patients preferentially choose higher-value providers, which is starting to be more true, but there are still many barriers to it.)

Back to the big picture: All-payer rate setting reduces the potential rewards for cost-lowering innovations, which I can guarantee will reduce the amount of cost-lowering innovation that goes on. So, yes, all-payer rate setting will be a barrier to cost-lowering innovation. And that’s a huge problem, so let’s look for other ways to fix egregious profits and costs. More to come . . .

Why Fee-for-service Reimbursement Is Bad. Wait . . .

When someone is arguing that the health system needs an overhaul, one of the most common reasons they cite is that “our health system is built on a flawed foundation of fee for service.” Arguments like this always sound so bulletproof when they rely on vague yet widely accepted assumptions, but let’s think clearly about this, just for a moment.

First, let’s go back to Econ 101 to recall that association does not imply causation. So, when you see a health system based on fee for service that is delivering surprisingly low value, you are seeing an association. It starts to look a lot more like causation when you compare this health system to other health systems in the world that are not built on fee for service but are all delivering much higher value. But it starts to look a lot less like causation when you compare this health system to any other industry and see that nearly all of them are based on fee for service yet somehow delivering excellent value. (I’ll come back to this later.)

So what is fee-for-service reimbursement, really? It is simply one extreme end of a spectrum, and at the other end sits capitation:

1This spectrum is not well understood. People always think of it in terms of incentives (“bad” incentives at the fee-for-service end, “good” incentives at the capitation end), but what is actually being varied as you move from one end to the other? I’ve never heard anyone talk about that. So let’s talk about it; the conclusion will be surprising.

I will say that fee for service is the purchase of a narrowly defined service (e.g., a single doctor visit, a single operation, a single medication), whereas capitation is the purchase of a broadly defined service (e.g., all health care you need for a year). So, breadth of service purchased at one time is really what varies on this spectrum. But in addition to the breadth of the service being purchased, there is another important difference: risk. When you pay for narrowly defined services one at a time, you have all the risk (meaning, if you get sick or break your arm, you’re the one who is financially accountable). And when you pay for a broadly defined service, the party you’ve paid has all the risk (meaning, if you get sick or break your arm, they’re the one that is financially accountable). Note that this is primarily where the “accountable” comes from in accountable care organizations–they have the financial risk, not the patient.

This is a spectrum because a service could sit at any point along it. For example, Qliance offers flat-rate, no-limit primary care; they are financially accountable for anything that could be considered primary care. Another example is episode-based billing, where the patient pays a single lump sum in exchange for a guarantee that the provider will do everything necessary to treat the specified medical condition. An interesting side note is that even a typical fee-for-service doctor visit is not truly fee for service in the sense that the patient has all the risk; at least, last time I checked doctors don’t make patient pay larger copays any time appointments run longer than the allotted 15 minutes.

2So what can we conclude from this discussion? Is fee for service actually bad?

Being too far at the fee-for-service end of the spectrum can definitely be bad if it means patients are expected to coordinate complex care by themselves. But being too far at the capitation end of the spectrum can also be bad if it means patients are not at all financially responsible for the services they choose to consume and are also stuck having to get all their care from one source that will inevitably provide less-than-exceptional quality for some services.

This means we need to find the perfect point somewhere in between the extreme ends of the spectrum where our health system will deliver optimal value. This point obviously depends on the service and the individual involved, as well as who can bear risk most effectively, but the way to think about it is using the “jobs” principle as taught by Clay Christensen. When a person enters the health system, it’s because they have a “job” they want to get done. That job generally isn’t something as narrow as to get an x-ray; more likely, their job would be to fix a suspected broken arm, so they’re looking to purchase all the services together that can fulfill that job. The job could also be broader, like to have the peace of mind that they have little to no healthcare-related financial risk and can just go and get care from one source no matter what comes up, or also to have help to keep healthy and thereby reduce care-requiring episodes (think: Kaiser Permanente and similar integrated delivery systems).

If we want to successfully redesign our healthcare delivery system (isn’t that all the talk these days?), we need to understand that fee-for-service isn’t intrinsically bad; the only bad thing is missing the sweet spots on that spectrum.

One final, crucial point: Yes, overhaulists* properly attribute many of the problems in our system to it sitting too far at the fee-for-service end of the spectrum (e.g., overtesting, overtreating, fragmentation), but they have overlooked what has caused the system to fail to adjust itself to a more optimal, jobs-focused point on the spectrum, as other industries do. This has everything to do with value not being financially rewarded in our system, and it is the topic of the publication I’ve been working on, as well as many future blog posts that will start to lay out the solutions more cohesively (after my publication comes out). More to come!

* My term for someone who believes the entire health system needs to be overhauled

UPDATE: Added a paragraph or two for clarity.

Why Aren’t Prices Transparent in Healthcare?

Image credit: presentermedia.com

I had a friend ask me that (the title of the post) a few days ago. He prefaced the question by saying he’s asked a few different people and knows already that there isn’t a simple answer to it. But those other people he asked misled him. The answer actually is quite simple. And why nobody is explaining this clearly, despite all the talk about price transparency in healthcare these days, is a symptom of a general lack of understanding of how industries actually function.

Prices are transparent in healthcare–the insurer knows exactly how much they’ll pay each healthcare provider for every service they cover. The problem isn’t transparency. The problem is that the party making the decision on where to seek care is not the same party that bears the financial consequence of that decision. Who chooses where to seek care? The patient. Who bears the financial consequence of that decision? The insurer. Therein lies the rub.

Think about two different scenarios. In the first, the patient will have both responsibilities. Patients would start to actually consider whether the extra $5,000 they would have to pay to go to Provider B for their cholecystectomy would be worth it as opposed to just going to Provider A. Is Provider B’s quality actually that much better to make it worth the extra $5,000? If not, patients will probably choose Provider A. And what happens when patients all start being unwilling to pay unjustifiably high prices? Provider B will either have to lower prices (goodbye crazy price variations!) or continue to deal with a large number of unused operating room hours. Patients win because they get better value, and high-value providers win because they get patients. In this situation, the decreased expenditures on healthcare are taken from the low-value providers. Who would argue against that? In this case, even the “I’m better than the average physician” belief that 100% of physicians have (statistically impossible as it may be) will help to decrease healthcare expenditures.

This pairing of both responsibilities in patients is actually happening, by the way. Why do you think insurers are trying out reference pricing, where they just commit to put a set dollar amount toward a given procedure and have the patient cover the difference if they choose a provider who charges more than that? And what about tiered plans, where patients choosing to go to the more expensive hospitals (the ones in the higher tiers of the insurance plans) have to pay a larger copay? And what about high-deductible plans for services below the deductible? These are all doing the exact same thing but in different ways: making the person who chooses where to get care the same person who bears the financial consequences of the decision. And providers with higher value are being rewarded with increased market share (volume).

In the second scenario, the insurer will have both of those responsibilities. It’ll still bear the financial consequences, of course, but now it’ll also be the one that tells patients exactly where to go for care. Patients wouldn’t like this, of course, but what would happen? Insurers would send every patient to the cheapest provider that meets minimum quality standards. Unlikely to ever happen? For run-of-the-mill procedures, probably it won’t ever happen. But for incredibly expensive one-time procedures, it already has. I heard a story about an insurer that did this with liver transplants (which, all told, is estimated to cost over $500,000 dollars). The insurer asked around to all the reputable local hospitals and got the cheapest bid for each patient. Then they sent each patient to the lowest-bidding hospital. The insurer saved a bundle. And the hospitals that could offer lower prices (possibly because they had lower costs somehow) were rewarded with volume. Ah, that whole reward value with volume thing again. It’s beautiful.

One final real-world example. ACOs. So far, one major way they’ve saved money is by sending patients to cheaper specialists. Let’s apply the principles we’ve just talked about to understand what’s going on. The referring provider is generally the party charged with making the decision of where the patient will go for a specialist visit. (The doctor says, “You need a specialist to look at this. Here’s the phone number for a good doctor, so go see her.” The patient says, “Okay, Doc, whatever you say. I’ll go see her.”). And when the referring provider is getting a bonus for keeping overall costs down, he now also bears the financial consequence of sending patients to expensive specialists because it’ll cost him his bonus. Now that you understand the principle of those two responsibilities needing to be invested in the same party, the world starts to make sense; you start to actually be able to predict whether something will work or not.

So now when you hear people complaining about our “horrendously evil system of third-party payment,” you’ll know that it’s not intrinsically a bad thing. It’s only bad when it results in a separation of those two responsibilities, the decision-of-where-to-seek-care responsibility and the financial responsibility.

How to Reward Value Instead of Volume

Who has heard the favorite healthcare reform saying these days? “We need to reward providers for value, not volume!” It has almost become cliche. And conventional wisdom would teach that something touted frequently would be well thought through by the people touting it; but we all know conventional wisdom is often wrong. (Did I just say that the knowledge that conventional wisdom is often wrong is conventional wisdom?) I admit that I have not read everything by everyone doing the touting, but I’ve never heard anyone break down exactly how we can reward value instead of volume. So I’ll tell you.

There are only two ways to do it: a dumb way and a smart way. But first, let’s review how a healthcare provider makes money:

Revenue = Price x Quantity

Do you see that there are only two components (that we can control, at least) that determine how much money a company makes? We can change the prices we pay them or the quantity they sell.

Now, let’s suppose we are able to identify an objectively highest value healthcare provider out there. Let’s further suppose that we want to reward this high-value health system for its amazingly high value so that it can be financially rewarded for being so awesome and so (we hope) others will copy them to have high value and be rewarded, too. How can we do it? Let’s look at our two options:

Increase price: You’ll recognize this as what Medicare is trying to do. Will it have the intended effect? Probably. High-value providers will be rewarded with higher prices. But hold the phone–isn’t our true intended effect to get society the highest-value healthcare we possibly can? So how are we maximizing value if we’re raising prices? Raising prices lowers value. So we’re identifying the highest-value providers and then lowering their value. Hm. Ah, but maybe there will be an overall aggregate effect of higher value because we won’t raise prices much, but we’ll get lots of low-value providers to improve their quality. I guess. But all this seems to be doing is increasing the total money we pay on healthcare, which is not a good idea right now. So I call this the dumb approach. But people haven’t thought hard enough to know there’s also a smart approach . . .

Increase quantity: What this means is getting more people to the highest-value providers, so now we’re rewarding value with volume. Their hospital beds are full, their specialists are performing lots of high-margin surgeries, etc., and they are rewarded handsomely for being high value. Not only does this reward the high-value provider, but look what happens to patients–they get to have higher-value care because they’re going to the high-value providers! In other words, society collectively will be receiving higher-value healthcare. And the low-value competition, meanwhile, will not be so busy anymore, they’ll start to lose money, and they might actually go out of business UNLESS they improve their value as well. That’s quite an incentive to change (probably the most powerful one, actually).

So why aren’t we doing this rewarding value with volume thing? I could list a bunch of reasons why we’re not, but that wouldn’t be very clear thinking now, would it? Instead, I’ll ask this: Who is deciding which providers patients will go to? Whoever is making that provider selection (sometimes it’s the insurer or employer, sometimes it’s other providers, usually it’s the patients themselves) needs to (1) have the price and quality information necessary and be able to determine which provider they think is the highest value and (2) bear the financial consequences of their choice (otherwise they’ll just choose the highest quality every time without regard for price!). If the provider-selecting party can meet both of those conditions, they will be making what I call value-sensitive provider selections.

In summary, policy ideas to reward value with higher prices will not do much for aggregate healthcare value our society is purchasing. But policy ideas that can get those 2 conditions fulfilled for the parties making the provider selections will successfully reward value with volume and concomitantly provide low-value providers with an ultimatum to either improve value or go out of business.

So the questions we should be asking ourselves if we want to “reward providers for value, not volume” is How can we remove the barriers to value-sensitive provider selection?” When will I write another post that enumerates all of the most salient barriers and how to remove them? Ask me tomorrow, but not today.

Customers Determine the Financial Incentives

Image source: http://www.aldarin-electronics.com

This is one of the great non-understood truths about how industries work: (see title). [Brief pause to let the words sink in.] Let me illustrate:

I was at the 2012 Healthcare Conference at Harvard Business School and heard H. Lawrence (Larry?) Culp, the President and CEO of Danaher Corporation, speak. Danaher Corporation, just so you know, is one of the big suppliers to the healthcare industry. It’s the parent company for a ton of brands that make really sciency devices and diagnostic stuff. And now that I’ve slaughtered the description of the company. . . . So, Mr. Culp spoke about how profitable they are and how successful they are and whatnot, and then he opened it up for questions at the end.

Now, before I tell you what I asked him, you should know that I’ve always believed, based on what I learned in my business strategy education, that if we could fix the financial incentives in the healthcare system itself, the suppliers to the healthcare system will have their incentives fixed for them as well. So, if doctors all of a sudden start making tons of money by providing really high-value care for patients, but the big thing limiting them from improving their value by decreasing their prices even more is the cost of MRI machines and diagnostic tests, I’ve thought that the makers of those MRIs and diagnostic tests would see that, if they want to kill their competition, all they’d have to do is find a way to make much cheaper stuff to sell to the doctors, and the doctors would jump all over it. But, before the suppliers will invest money into developing those cheaper MRIs and diagnostic tests, they have to know that the doctors really want and will preferentially purchase cheaper stuff that still gets the job done.

So, with that background, I asked my question to Mr. Culp: “I see your company as a supplier of devices and diagnostics to the healthcare industry; in other words, you are providing a lot of the innovation to the industry. This is awesome, because it will help me do so much more for my future patients. But the discussion about how innovation is the main thing driving unsustainable health spending has become more and more important lately, so I’m just wondering, does that conversation affects how you choose to focus your R&D money by pushing you to start developing more cost-lowering innovations, or are R&D investments just determined by what customers are requesting?”

He gave a very professional and politically correct answer, and this is what it boiled down to: We’re a company, and just like every other successful company in this country, we’re trying to make money by making what customers will buy. As soon as customers start demanding cheaper devices and diagnostics, we’ll “pivot” our R&D investments toward those. (Yes, he actually used the word “pivot,” and it was very articulate of him.)

What’s the message in all of this? Customers determine the financial incentives.

Pop quiz: If everyone thinks MRIs are remaining unnecessarily expensive, how should we fix it?

  • A: Tell the MRI makers that they’re not providing high value machines, and then regulate them into developing cheaper technology
  • B: Realize that they’re not investing in developing cheaper MRIs because customers aren’t demanding cheaper MRIs, so figure out why customers aren’t demanding cheaper MRIs and solve that problem

I hope you chose the second option. Now apply this to what we’re seeing with all these regulations to try to fix the value provided by doctors and hospitals. Shouldn’t we be looking at the doctors’ and hospitals’ customers and fixing whatever is keeping them from choosing high-value doctors? The regulations will likely help, but they’re not going to be a sustainable solution to our providers’ value problem. We need to understand and fix whatever’s going on with their customers (ahem, patients and insurers). Oh, insurers aren’t providing the highest value insurance they could provide? Why could that be?

Parting thoughts:

In the medical devices/diagnostics-provider relationship, the provider is the customer. But in the insurer-provider relationship, the provider is the supplier. Remember, there is a whole chain of customer-supplier relationships in every industry, so this means if we want to fix the financial incentives in the healthcare system, we have to go all the way back to the very beginning customer in the chain and fix what they’re doing, which will then fix what the next party in the chain is doing, which will then fix what the next party in the chain is doing, . . .

Why Insurers Are Finally Investing in Primary Care

Image source: eurekafirerescue.org

First off, I apologize for the long delay between blog posts. I’m still here, and I still am obsessed with health policy. I’ve been working on a publication that outlines some of what I’ve figured out lately, and I’d rather people first see it in a publication by me rather than by someone else who came across it on my random blog and ran with it.

Anyway, let’s talk about why insurers are starting to do things differently lately. They’ve started doing pilot projects to see if investing in primary care will save them money by preventing unnecessary tests and services (they predict it will in a big way). They’ve also started investing more in IT to keep track of patients’ health information, again hoping they can use it to find ways to prevent patients from needing preventable tests and services.

Of course this makes sense. If they, as a business, can invest $500,000 in primary care and then save $600,000 by preventing a whole bunch of things down the road that they otherwise would have had to pay for, it’s a great investment! But why haven’t they started trying out these investments in cost-saving prevention until now? Remember that a business is always trying to use the money they’re making and invest it in projects that improve their financial performance. But there are a lot more options of projects to invest in than they have the money to invest. So they are trying to find the projects that seem to offer the greatest reward for the lowest risk. This would lead us to assume that these kinds of projects haven’t had a great reward-risk ratio until now.

I haven’t figured out a great way to organize my thoughts about this, so here they are in a random order. (FYI, one of the items in the list below is going to change, and it explains why insurers are changing their ways, so you better figure out which.)

  • If an insurer wants to invest in prevention, but then the patient switches insurance before the insurer gets to reap the savings, that was basically wasted money. Yeah the patient is healthier as a result, so that’s a small consolation prize, but the analyst who forgot to compare the expected payback period with the average length a patients stay on their insurance will probably still be fired.
  • Trying to pay a primary care physician to do better at keeping patients healthy isn’t an across-the-board money saver. Actually, it probably only saves money for a small portion of patients. But the thing that makes it worth it is that those patients are probably the highest-cost patients, so a ton of money still stands to be saved.
  • Paying a physician more to establish a medical home or hire a care manager or something like that probably involves the insurer paying the whole cost for the physician to do that, otherwise they won’t. And since the physician has the care manager, chances are he/she will use that care manager for all his/her patients who need the service, including patients that are covered by other insurers. So the insurer is now stuck paying for a competitor’s patients to get healthier, saving the competitor money even though the competitor didn’t invest a thing.
  • An insurer won’t be very popular if they add services to only a select group of patients on the exact same coverage plan. Other people will say that’s unfair and demand to receive the same service. This would be annoying, and they’d have to find a way around it so they don’t end up spending all this prevention money on people who won’t end up saving them much in return.
  • People, when buying insurance plans, aren’t really able to compare the coverage offered by different plans. There are so many complexities, all they can really do is look at the price and look at some of the basic coverage provisions, but that’s it. There may be all sorts of limitations that they don’t even know about. Because of this, insurers can get away with offering a high-priced plan with not great coverage and still (through great marketing) convince a lot of people to buy it, so where is the reward in finding ways to lower price by doing cost-saving prevention when you can just add a few exclusions to save money instead and nobody will ever notice when they’re choosing their insurance plan?

I hope you figured out that the last one is changing. With new tools coming out that help people more easily compare the quality of coverage offered by different health plans, including insurance exchanges’ standardized levels of coverage, people will be able to spot the insurance plan with equivalent coverage but a way lower price. And when that happens, people will flock to that insurance plan. This is a significantly larger incentive to try out risky investments in cost-saving prevention, which also means it’s quite a risk not to try anything out for fear that you’ll lose all your customers. Finally, cost-saving prevention projects that actually decrease overall health spending and keep patients healthier will top every analyst’s list!

And in case you’re wondering what role increasing health costs have played in this whole thing, the answer is . . . probably nothing. Health costs have always risen, and insurers have always raised premiums to maintain pretty constant profit margins. Sometimes spending increases slower and they make a bundle, sometimes costs rise faster than predicted and they increase premiums even more the next year. But none of this changes the risk-reward evaluation done by analysts to decide if they should finally start to invest in cost-saving measures, although it might in an indirect way because people are clamoring louder (as costs rise) to get cheaper health insurance, but unless those people were finally able to compare the value of different plans, all their clamoring wouldn’t have much of an effect on insurers’ investment strategies.

What the Government Should Do to Help Flailing Industries

I recently reread two really good pieces on different roles the government should take in helping flailing industries. One was the last chapter of Clay Christensen et al.’s The Innovator’s Prescription, and the other was Atul Gawande’s Testing, Testing. Plus, I have my own addition. (Bear in mind, this all relates to established industries, so I won’t mention the additional subsidizing roles the government could take in helping the foundation of industries.)

Christensen et al. tell multiple stories that are all pretty similar to each other, but here’s a typical one: the government sees that mainframe computers are really expensive and that IBM has a near monopoly on them, so, using the “increase competition, lower prices” dogma, it spends tons of money trying to break up IBM. Meanwhile, new innovative companies come along and meet the same computing needs of consumers with way cheaper micro-processor-based computers, lowering prices for computing way more than competition amongst a bunch of broken up IBM competitors could ever have. Moral of the story #1: instead of worrying so much about monopolies and other limitations on sustaining competition, the government should be more focused on identifying and eliminating regulatory barriers to disruptive innovators. This is when you should think about barriers such as against the building of specialty hospitals, certain prescription-writing privileges for physician extenders, and the licensing of dental health aide therapists for serving rural areas.

Gawande talks about the agricultural industry and how it was revolutionized into a much more efficient industry through a government program (that started out as just another pilot program) that eventually placed government-employed farming consultants in nearly every county. The role of the consultants was to continually provide to the local farmers information about the state-of-the-art methods for growing the best and most abundant crops. For some reason, the invisible hand of competition wasn’t enough to convince farmers to use new farming techniques. Moral of the story #2: if competitors don’t have access to information that can help them improve value, or if the implementation of such information is above their ability/willingness to try, the government can help information flow and help competitors implement that information, possibly by providing subsidies that take away the downside risk of implementation or by teaching how others are doing it.

And here’s my addition: before we can start worrying about removing regulatory barriers or helping information flow and implementation, we need to remember that the goal of all this is to improve the value of the industry, and then we need to make sure financial incentives are aligned with what we value. What I mean is, without the financial incentives to develop a cheaper version of a mainframe computer, it would have taken a lot longer to come about; without the financial incentives for farmers to use new techniques to grow and sell more crops, they would have been even more hesitant to try the new ideas out. Moral of the story #3: until financial incentives are aligned with value, anything else the government does to try to help low-value industries improve (including the first two morals of the stories) will be severely limited in efficacy. I can’t think of another privatized industry in history where financial incentives haven’t been aligned with value, so I think this point isn’t as obvious to people.

Is this list exhaustive? Honestly, I don’t know. I guess the question I need to be able to answer is, Are there other causes of competition failing? I can’t think of any others, but I’m not enough of a markets historian.

Also, this post obviously doesn’t explain exactly why I think financial incentives aren’t aligned with value in healthcare, but that’s what I’ve spent the last month writing a perspective article about (thus, the long time since my last post), and the ideas will make it to my blog hopefully soon.