Rafid Fadul, MD, MBA

Abstract: The health care sector is plagued with an inherent asymmetry of information and opacity that severely inhibit a competitive marketplace. Other industries, such as professional sports, have a transparency that better allows for “valuation” of the services rendered, and consequently have seen the overall quality in their respective sports improve over time. It is imperative that health care move to a more transparent system in order to foster a culture of competition and perpetual… Show more

Abstract: The health care sector is plagued with an inherent asymmetry of information and opacity that severely inhibit a competitive marketplace. Other industries, such as professional sports, have a transparency that better allows for “valuation” of the services rendered, and consequently have seen the overall quality in their respective sports improve over time. It is imperative that health care move to a more transparent system in order to foster a culture of competition and perpetual improvement. Show less

Garrett Hardin’s essay “The Tragedy of the Commons”1 aptly describes the current state of the U.S. health care system. Hardin tells the story of herders who make what are individually rational decisions to exploit common land by grazing as many cattle as possible, to the ultimate detriment of the land and consequently the common good. The herders are not villains; rather, they are doing what makes sense given the system in place. Analogously, many observers are currently tempted to cast certain… Show more

Garrett Hardin’s essay “The Tragedy of the Commons”1 aptly describes the current state of the U.S. health care system. Hardin tells the story of herders who make what are individually rational decisions to exploit common land by grazing as many cattle as possible, to the ultimate detriment of the land and consequently the common good. The herders are not villains; rather, they are doing what makes sense given the system in place. Analogously, many observers are currently tempted to cast certain players in the health care arena as villains, but they are merely doing what is rational given the current incentives and rules of the game. In the current system, the three major participants — providers, payers, and patients — do what is in their best interest without concern for cost or effectiveness. This focus is appealing in the short run but leads to a destructive endgame. Only by tackling the underlying misalignment of incentives can we ensure the long-term survival of the U.S. health care system.

For patients, the emphasis must be on personal responsibility. The current U.S. system is not structured to provide incentives for less expensive preventive care and healthier lifestyle choices. This failure has led to spiraling costs associated with largely preventable diseases. By contrast, insurance companies in the Netherlands have devised plans rooted in libertarian paternalism, offering patients discounts for healthy lifestyle and diet choices. This approach acknowledges process, which empowers patients, rather than outcomes and has led to sharply reduced costs and healthier patients.

Providers must address the well-documented disparity in cost and quality of care for even common conditions such as hypertension. A process-based metric for evaluating physicians — one that is easily grasped by the general public — will encourage transparency, force physicians to examine and ameliorate their deficiencies, and allow patients to make truly informed decisions, encouraging Show less