Hospital Administration


Case Discussion

Why Can't Indians Get Health Care Right?   Posted By Purshottam Hoovayya    Date : 17-Aug-09   10:40 AM     Reply

Sharing an article submitted by James Heskett HBS a Baker Foundation Professor, Emeritus, at Harvard Business School.

'Why Can't Americans Get Health Care Right? It is said that health care is the biggest threat to the long-term health of the U.S. economy and therefore, to some extent, the global economy. Americans pay much more for what they get (at least measured in terms of share of GNP spent, results obtained, and the percentage of the population covered) than any other country. And things don't seem to be getting any better.

There are a large number of examples of various approaches to the problem extant in the world, nearly all of which include greater government involvement than in the United States. The current debate in the U.S. centers, to some extent, on whether there should be a publicly administered alternative to the private health care system, as opposed to other countries in which private care is supplementary to the public system.

Harvard economist Greg Mankiw, for example, argues that a public option, to the extent that it will require Government subsidy while providing price leadership under a nonprofit cover, will over time drive most if not all health care to the public option (as happened with home mortgage giants Fannie Mae and Freddie Mac), creating the equivalent of a single-payer option. As he argues, "consumer choice and honest competition & are usually achieved without a public provider. We don't need government-run grocery stores or government-run gas stations to ensure that Americans can buy food and fuel at reasonable prices." The problem, of course, is that we are not talking about food and fuel; we're talking about health care, about which consumers and providers may be less rational.

For example, behavioral economists would tell us, among other things, that in the world of health care: (1) consumers have personal fears and lack of information that don't exist with food and fuel, (2) they equate cost with quality, turning the idea of rational markets upside down, (3) individuals' decisions regarding wellness affect the rest of us, (4) rationing is necessary but difficult to achieve, (5) there is an agency problem when neither payers nor providers (including pharma) are penalized by higher costs, (6) there is a "fee for services" vs. a "fee for results" payment system, (7) the U.S. has too many high-cost specialists performing work that could be performed more effectively by general practitioners and registered nurses, (8) high levels of liability encourage the practice of "overly-safe" and expensive medicine, (9) providers have fragmented and often incomplete information, and (10) consumers either have too little information with which to make rational decisions or don't make good use of the information they have.

Why, in a country that provides more medical research to the world than any other, can't Americans get health care right? Is it a problem of too much money chasing the problem? The wrong kinds of capacity? The wrong incentives? Too little or too much regulation? Too much pride in a dysfunctional system? What, if anything, can we learn from solutions implemented by other countries? For example, should Americans have a public option? What else? What do you think?'

Opinion 'Based on the solution present in the global market on the the insurance and the research going on to inculcate single payer public insurance among the the first nation world'(N. Gregory Mankiw), what would be an ideal solution for the world based on revenue model ..... should it be public insurance with subsidized health care to all people with the tax payers money or the private / public health insurance combination.... private insurance may cause inequality of the quality healthcare distribution where as the public health insurance will cause equality of health care with high expenditure on the governments exchequers(after all why are people paying taxes) , some of the the states like the Andhra Pradash and Goa have already gone for the Public Insurance system of free health care to its people. Should other states follow public insurance system for equity and choices of health care for their people ?

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