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WSJ: Cheesecake Factory Medicine

Posted Aug 28 2012 9:00am
The 8/27/2012 Wall Street Journal discusses the government push towards top-down standardized health care in " Cheesecake Factory Medicine ".

In particular, they discuss Dr. Atul Gawande's proposal that American health care should be modelled more like successful chain restaurants such as the Cheesecake Factory.

It is true that there are efficiencies to be gained by economies of scale in health care, as in many other industries.  But the WSJ notes
No doubt health care could learn a lot about efficiency from a lot of industries, but to understand the core problem with assembly-line medicine, recall that ObamaCare actively promotes medical corporatism. The reason isn't to encourage business efficiency but for political control. Liberals believe in health-care consolidation because fewer giant corporations are easier for Mr. Orszag's central committee to control, and more amenable to its orders.
The writer Jonah Goldberg once described a similar strategy of government-driven economic consolidation during the New Deal
[If] you want to use business to implement your social agenda, then you should want businesses themselves to be as big as possible. What’s easier, strapping five thousand cats to a wagon or a couple of giant oxen?
Similarly, it will be much easier for the federal government to regulate 100 large "hospital networks" or "accountable care organizations" (ACOs) than 10,000 small private practices.

In a separate article, the 8/27/2012 WSJ also noted that government-driven consolidation often drives up prices, because of decreased competition: " Same Doctor Visit, Double the Cost "
...[A] structural shift... is sweeping through health care in the U.S.—hospitals are increasingly acquiring private physician practices.

Hospitals say the acquisitions will make health care more efficient. But the phenomenon, in some cases, also is having another effect: higher prices.

As physicians are subsumed into hospital systems, they can get paid for services at the systems' rates, which are typically more generous than what insurers pay independent doctors. What's more, some services that physicians previously performed at independent facilities, such as imaging scans, may start to be billed as hospital outpatient procedures, sometimes more than doubling the cost...
In effect, the government is creating artificial monopolies (or near-monopolies) in many markets.

The hospital chains will then take advantage of this politically-favored position to raise prices.  This will then lead to calls for more government regulations to cut costs, accelerating the vicious cycle of ever-increasing central government control over medicine.  Controls breed controls.

It's time to get off this treadmill by repealing ObamaCare, decontrolling medicine, and allowing free-market reforms in American health care.
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