Setting a Foundation for Conversation

Given the democratic and capitalist bedrock the United States was founded on, very few in the mainstream media (and political environment) have debated the challenges related to applying market forces to public goods.

While education, law enforcement, water utilities, and other traditional "public goods" have been subject to competition from the private sector, few (with perhaps the exception of Energy) have financed private development through public funds to the degree health care has been in recent decades. Since their inception, Medicare and Medicaid have use public funds to provide cost based and fixed cost payments to facilities regardless of its government, non-profit, or for-profit status. In so doing, providers have been incentivized to reduce costs below the payment level in an effort to achieve some margin to be reinvested into the community (government/non-profits) or to provide a reasonable return to shareholders (for-profit).

Arguably, the for-profit sector has done an impressive job in modeling the ways in which health care costs can be reduced under this model and recent joint ventures with physicians have shown the savings that can be achieved when hospitals and physicians are together incented to cut cost and achieve ever-higher margins (see the latest quarterly results from USPI to glimpse the degree of magnitude).

Our discussion begins, however, with the nature of public goods. And as a global citizen, I will postulate that public goods must not only be run efficiently (which markets do impressively through Friedmans "Invisible Hand") but must also provide the service adequatly (i.e. with the greatest degree of quality) and equally (i.e. that the service is equally distributed as possible).

The policy challenge around health care therefore becomes one that does not solely maximize efficiency, but one that also achieves increasing levels of quality to a wider and wider spectrum of individuals regardless of race, geography, or socio-economic status.

Upon my own reflection, leaders and policy makers must then wrestle with how we provide and pay for health care services in order to maximize the "public good"... the founding question of this blog and the rubric in evaluating our policy and operational challenges of the past, present and future...