Friday, October 26, 2012

An Apology


I was too harsh in my response to you about information asymmetry and medicine, and I've had a huge case of the guilts ever since I posted it. Let me try it a different way.

I appreciate your point about information asymmetry and medicine. But I don't think those characteristics are particularly unique to medicine. There are plenty of everyday things we do as consumers and sellers which involve one party knowing more than the other, yet those markets function well. I have the same comment regarding fee for service. There are many markets that are fee for service and function quite well, so again, I don't think medicine is unique in that aspect.

As far as competition in medicine, I look at it two ways. First, we can look at evidence in other industries, like airline deregulation, natural gas pipeline deregulation, natural gas (drilling) deregulation, for instance, and see tremendous benefits to consumers (lower prices, more choice) after the deregulation occurs, and I would say because of deregulation.

So if it works in one market, is there anything about a different market that would suggest deregulation wouldn't work. Now the two things you have suggested, information asymmetry and fee for service, are quite common in unregulated industries, so in my opinion, you need to point to something else.

Here's my final thought about it. We both know what we are doing isn't working. We both know it can lead to a catastrophe for the country. So is it really that big a risk to try something a little out of the ordinary?

Sorry for the sarcastic version I posted yesterday.


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