So, after all, what should we do about health care?
Health care is not a perfect market; it’s hard to price-shop for heart surgeons. But markets usually do the best job allocating between quality and quantity for millions of consumers. Our discussion so far has shown that there are many complex issues and trade-offs. What we need to do is make the market more effective.
Freeing the system from the employer-benefit link would strengthen the market’s role. Encouraging consumers to access more information would strengthen the market’s role. Improving the financial benefits of healthy lifestyle choices would also strengthen the market’s role. But a centrally planned single-payer system with no competition is unlikely to be efficient, effective, or have the kind of quality that we have come to expect.
In the end, a series of ad-hoc changes that address various issues at the margin is probably the best approach to reform. Democracy is great at finding compromise solutions for complex problems. As the political process unfolds, we should expect our leaders to give the system a healthy workout.
Douglas R. Tengdin, CFA
Chief Investment Officer
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