Thursday, February 19, 2009

The President's Health Care Agenda

The President's health care agenda (although not much of a plan yet) is outlined for all to read on the following website: The plan includes eleven bulleted points and a few extra details. I will not discuss the entire plan this evening but I will focus on one bulleted point: to require hospitals to collect and report health care quality and cost data. Economists like to assume that consumers will use all information that is available to them. However, we often make decisions based on habit rather than based on a rational assessment of all information. Further, many times when using a hospital, individuals are making an urgent or emergency decision. This limits our ability to make rational use of data as we don't have time to consider all possible options and all implications of those options.

Additionally, there are still issues of geographic proximity and pre-existing relationships with providers that will not change. People don't like to change physicians and ultimately people will generally go to a hospital that is the nearest in many cases. Thus, collecting and reporting cost and quality data will change expenditures on health care slowly at best.

Finally, consumers' ability to use the information very importantly depends on who aggregates the information, where it is kept, and how it is made accessible to consumers. Working only with the agenda that is on the web and not the entire plan, the best we can do is hope that the United States leadership in 2009 thinks long and hard about the best way to provide incentives for gathering high quality and accurate information, to provide a forum for storing and sharing the information, and to provide consumers and health care providers with incentives to use the information.

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