Thursday, May 29, 2008

THE IDEA OF COMPETITION IN HEALTHCARE

POSTED RESPONSE TO A COLUMN BY CLIVE CROOKS IN THE FINANCIAL TIMES

While you can inject elements of competition into healthcare here and there, you cannot have a "competitive system." It's an oxymoron. Why?

Because most of the key parts of the system are monopolies or quasi-monopolies.

Being a medical doctor means you join a group against which no one else can compete. You can play around the edges with nurse practitioners and "American-style "medics," but at this time you cannot change the reality.

Again, in pharmaceuticals, we have in many cases effective monopolies.

Hospitals, too. You don't build a competitive hospital across the street the way you build another hamburger joint.

Technology, too. Many specialized machines do not have competition and are very costly.

In fact, in the States, specialized facilities like MRIs in many places are already quite underutilized, raising costs.

U.S. per capita expenditures in healthcare are tremendously high by the standards of Canada and are rising rapidly, yet their average outcomes don't reflect it at all.