Monday, March 24, 2008

How might we get more health per dollar spent on health care? It's not a matter of private insurance vs. single-payer:
Tyler Cowan alerted me to this NBER Working Paper by Sherry Glied. (Unfortunately, the full report is gated.) Based on an analysis of data from 20 developed countries, she concludes:

1. There is no general relationship between the way in which countries pay for health care and their ability to control costs. Public v. private financing, general revenue v. payroll taxes, third-party v. out-of-pocket spending - nothing seems to matter very much....
So, what to do? I'd bet Arnold Kling has the right idea:
Our camp believes that the United States could reduce health care spending substantially without hurting health care outcomes. However, the path to getting there involves lots of research into the efficacy of various procedures as well as changes in behavior (Orszag refers to physician norms as an example).

The other camp, which includes Jacob Hacker writing in today's Washington Post, says that all you have to do is socialize medicine and magically costs will come down. That is unlikely.
My guess is that if there was a government agency that did research into health-care cost-effectiveness and then produced guidelines, then this would go a long way in changing physician norms. And oh, change is needed.


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