Investor’s Business Daily (IBD) has an editorial asking one of the stupidest questions you are likely to hear this year, Why Is There No Uber For Health Care? It is based on a paper by pretend wonk Avik Roy, Health Care 2.0: Ushering in Medicine’s Digital Revolution (pdf). Before I get to the specifics of the stupid question, let’s go over a few issues that the editorial raises.
First, IBD thinks healthcare costs are all about technology. This isn’t even close to being true. For one thing, in Japan, they have a lot more healthcare technology than we do, yet their healthcare spending is much lower. People who make these kinds of arguments are all free marketeers who are just looking for some reason to claim that the free market will save us if we just let it.
Well, a free market in healthcare might be just fine. But the people at IBD aren’t interested in that. And Avik Roy certainly isn’t interested in that. They aren’t calling for an end to licensing of doctors. In fact, they aren’t even calling for an end to restrictions in doctors immigrating to the US. Because that’s the reason healthcare costs so much: doctors get paid two to three times as much in the United States as they do in other advanced countries. Do we have better doctors than they do in Canada and Japan and Germany? I don’t think so.
Then IBD asks a question about all this technology, not understanding its wider ramifications, “Why would any consumer demand a more expensive product if they had no idea whether it would work?” Well, the truth is that most people do not demand a more expensive product. But generally speaking, healthcare customers are not knowledgeable enough to make good healthcare buying decisions. This is why the neoliberal approach (Not to mention the free market approach!) is not a good way to provide healthcare.
But the editors — based upon Avik Roy — go in the opposite direction. The real solution is to get rid of insurance! It’s the conservatives’ great solution to everything: health savings accounts so that people can count every penny and not go in for expensive procedures! Of course, they started with the understanding that people don’t know what they are doing when it comes to healthcare.
But there’s another issue here. Ultimately, conservatives all think we should save money on healthcare by getting less of it. They don’t want to deal with the issue that the healthcare itself is too expensive. And let’s face it: it’s a false saving. Because if you get people to count their pennies, many of them will decide they can save a buck by not getting preventative care or taking drugs that will lead to much more expensive care later on.
Big on Avik Roy’s radar is that the insurance that people get, they don’t pay for directly. Thus the “direct consumer is largely indifferent to the price.” But surely the businesses and government agencies that are paying for the insurance care about price and are in a much better position to negotiate it. Again we are back to the idea that the more the individual has to pay for care, the better. But the truth is that increasing co-pays and similar devices have not been shown to cut down on unnecessary care.
The great Avik Roy trick in all this is that technology will save us. This is the answer that conservatives have for every problem. And there is no doubt that technology can help. But the kind of technology that Roy and Carly Fiorina and the editors at IBD want is market innovation. They want a way to make it easier for customers to compare prices. They want a little app that will allow people to get the best price on a colonoscopy. Okay. I’m not saying that might not save a few pennies.
But it wouldn’t be like Uber. Uber saves money because it is a low-skill service. It has thrived because there are a bunch of out of work, desperate people. And it effectively placed all the burden on these powerless people. In as much as it has changed the market, it has taken a pretty bad job and made it worse. Yet in the entire IBD editorial, the word “doctor” is used only once — and then in a quote that they attack. Do they really think that doctors are going to allow themselves to be Uberred?
No. What it all comes down to is that the people at IBD and Avik Roy (who I’ve been following for years), don’t give a damn about providing healthcare. They just want to keep taxes down and salaries high for the already rich. So they will nibble around the edges. Medical technology! Skin the game! Malpractice insurance! In fact, the article even talks about the high price of drug entrepreneurship, without discussing all the billions of dollars that the government does in drug research that makes the drug companies rich.
A couple years ago, Avik Roy went through a cycle. He kept writing articles about this or that country that had a supposed free market healthcare system that worked. And then, an actual healthcare wonk would point out why he was wrong. So Roy would move onto another country. Because there just isn’t a country that provides reasonably priced high quality healthcare without having the government very much involved.
The problem is as it always is with conservatives on any issue. They are constrained by conclusions. Yes, they would like everyone to have good paying jobs, but only if the solution is that we lower taxes on the rich and get rid of regulation. And they would like everyone to have good affordable healthcare — but only if it involves the government only helping the rich stakeholders in the process. If it involves subsidizing individuals, forget it.
For more on this, see my article from three years ago: Avik Roy: Healthcare Apologist.