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Competition would also transform the medical information market, making it radically transparent. In fact, baby steps toward transparency have already begun. Angie's List now allows consumers to submit reports about their experiences with physicians. Sources of information for medical comparison shopping would proliferate, just as there are now dozens of publications devoted to comparing the features and prices of cars, computers, guns, and vacations. A core of savvy shoppers in the medical market will mean better price and quality comparisons for everyone.
Wondering what shopping in a competitive medical market might be like? Check out the admittedly clunky California government's common surgeries and cost comparison website. Browsing reveals that the cost for heart valve replacement varies from $72,000 to $368,000, and the cost for angioplasty varies from $9,000 to $204,000. Other websites, such New Choice Health, enable consumers to go shopping for relatively routine procedures like colonoscopies, laparoscopic hernia repair, and MRI scans. Prices for colonoscopies in Washington, DC, for instance, vary from $580 to $1,386, hernia repair from $974 to $2,519, and abdominal MRIs from $936 to $1,960.
Opponents of markets in health care worry that patients in extremis will be in no position to negotiate. Actually, the slow progress of the kind of chronic illnesses that are driving up health care costs—cancer, coronary artery disease—allow consumers time to shop around for suitable treatments. Prostate cancer patients can evaluate and choose between options like watchful waiting, various radiation therapies, surgery, and soon, a new biotech immunological treatment. Information gathering would take no more time than the current wait for a follow up appointment.
Finally, one would expect that competition would spark that virtuous cycle in which innovation progressively drives down costs, just as it has in so many other areas of commerce. Medical care would become ever more affordable and thus reduce the perceived need for government intervention on behalf of the poor. In the meantime, the government should dismantle its medical entitlement programs—Medicaid, SCHIP, and Medicare—and use those funds to provide vouchers to the poor who could then purchase health insurance and health care in the private market.
Why bother outlining a vision of how market reforms of health care might play out? Perhaps the impending collapse of top-down reform proposals will open up a policy discussion about how markets can improve health care and reduce its costs. One can dream, anyway.
Ronald Bailey is Reason magazine's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.