Health care is different (no, I’m not done with this yet)

Last Friday, I suggested readers try to come up with other industries that share the following property with health care: the quality of the outcomes, what you ultimately are buying, depends not just on what you directly pay for but also your own personal characteristics. That is, you, or your insurance company, or the government, buy services from health providers and some health-related products (e.g. drugs). What you ultimately want is health. The quality of the health you achieve is not merely determined by the medical goods and services but by your own traits, habits, genetics, and so forth.

What else is like that? Education. It is exactly like that. You or your parents or your government pay for teachers and school buildings. What you want is knowledge and skills. The quality of the knowledge and skills you walk away with depends, in large part, on you (and your family and community), not just on your teachers and books.

A less good example is, perhaps, gym memberships. You pay for the facility, equipment, and trainer. What you get out of it in terms of fitness depends a lot on what you put in, your own habits and effort. Commercial diet plans and products are like this too. So is marriage or any relationship (though those aren’t industries). How it turns out depends a lot on you.

But one way in which health care is pretty different from education and gym memberships and everything else I can think of that has quality that depends on personal characteristics is this: the poorer quality the outcomes the more you consume.* Why? Because if you stop when things get worse you might die. If you have a minor and routine operation and you get an infection, you don’t stop consuming care. You don’t say, “Health care sucks. I’m outta here.” No, you pack your body with antibiotics and do what the doctor orders. If you should happen to have an allergic reaction to the antibiotics or other things go haywire and organs begin to shut down, you generally don’t call it a life, you go on the ventilator, the dialysis machine, … you do what it takes. (You’ll consume more auto mechanic services as things go wrong too, but that’s just one way health care is like auto repair. It isn’t like it in other ways.)

Going back to my earlier posts on how health care is different, I believe health care is unique in that it has all of the following three characteristics:

  • It involves mortality and morbidity,
  • Quality of outcomes depend, in part, on personal characteristics,
  • The worse the outcome, the more you consume.

These are not trivial aspects of the industry. The are essential features of it that contribute to why we consume health care the way we do (we can’t easily accept that poorer health states can’t be improved), why it is psychologically difficult to commit to doing otherwise (death and illness are powerful motivators of consumption), and why it is hard to agree on how to allocate the cost risk (heterogeneity really matters since outcomes depend on individual characteristics–do people in different circumstances deserve the same burden of cost risk?). Add to these information asymmetry, third-party payment, the importance of trust in the provider, barriers to entry, differentiated and complex products, and the fact that providers, like everyone else, want good and increasing standards of living and you’ve got something that bears very little resemblance to any other industry.

So, finally, I conclude that the notion that health care is like some other industry is, well, just wrong. It is only like this or that in a small number of dimensions, not including the combination of all three bulleted ones above. Thus, health care in total is not like anything else, and it never will be.

Really, this should be self-evident. If health care were so much like cell phones or auto repair or credit cards we’d have solved the health care cost problem by now. There are reasons it is a hard problem, why all previous well-intentioned approaches have failed (manged care, Medicare PPS, Medicare Advantage and its predecessors, and so on), and they are not all entirely due to politics, though it plays a large role. Health care is deeply personal, complicated, and deals with scary stuff. Treating it like it is just another commodity completely misses what is so diabolically special about it. That’s not to say we can’t make headway on health care and its costs. I just don’t think we can do so by trivializing its unique combination of important characteristics. We have to embrace and understand its full complexity and do something that respects the totality of health care and our relationship with it. And, on top if it all, we can only do something that is also politically viable.

What is that something? I won’t even pretend I know. I seriously doubt anyone truly does.

*Having a bad health outcome doesn’t require any use of care. Even folks who use no care can have bad health outcomes. In fact, failure to deal obtain good, preventative or maintenance care is a standard way toward poor health. Nevertheless, those who use care and, for whatever reason, experience a bad outcome, are likely to seek more, not less, care.

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