More books by David Goldhill…
“A recent Economist article on dialysis perfectly illustrates the inflationary impact of cost-plus pricing. Since U.S. clinics are paid on a cost-plus basis, they prefer to use expensive drugs rather than cheaper ones. In fact, many appear to order drugs in units that exceed what a standard dosage requires because they can charge the government for the wastage. Quoting a stock research firm, the article noted that many clinics preferred an injected drug with a price of $4,100 a year over the identical drug in oral form, priced at only $450 a year. Not surprisingly, the manufacturer of the oral drug responded by increasing its price above that of the injected version to make it more competitive!”
“But though I admire their intentions and ambitions, I contend that they have missed the big picture: the underlying insurance-based structure of our health care system drives excess treatment, cost inflation, and medical errors. It is this structure that needs to be changed.”
“As I’ve explained, prices are the tools by which modern economies allocate resources to match what consumers want, understanding that those wants are constantly changing. And a health care system without prices can’t adjust to changes in our health needs.”
Topics Mentioning This Author
|The Seasonal Read...: Fall Challenge 2012: Completed Tasks - DO NOT DELETE ANY POSTS IN THIS TOPIC||2321||703||Dec 28, 2012 03:29PM|
|The History Book ...: MEDICINE||140||478||Jan 26, 2019 02:44PM|
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