Healthy Competition: What's Holding Back Health Care and How to Free It [Paperback]

Michael F. Cannon (Author)

Book Description

Publication Date: September 9, 2005

America's healthcare system is at a crossroads, faced with rising costs, quality concerns, and a lack of patient control. Some blame market forces. Yet many troubles can be traced directly to pervasive government influence: entitlements, tax laws, and costly regulations. Consumer choice and competition deliver higher quality and lower prices in other areas of the economy. The authors conclude that removing restrictions can do the same for health care.

Editorial Reviews

From the Back Cover

"We begin with a riddle. What country's health care system offers the best health services in the world, is constantly criticized for not being accessible enough, and yet is so accessible that overuse is leading to runaway costs? The first part of the riddle reveals that the answer could only be America. The remainder gives the contours of a paradox that vexes policymakers year in and year out. Welcome to health care, American-style.... To carry the health care debate on its next lap, America first needs a clear, well-informed, and well-reasoned analysis of the apparent paradox of its health care system. And it needs an agenda for reform that respects the wonders that modern medicine has developed and the creative market processes that deliver them. Cannon and Tanner offer proposals that would further tap the power of markets to make health care more valuable and more affordable. That makes Healthy Competition essential reading."
--George P. Shultz, Former Secretary of State

"Surprisingly readable, extraordinarily comprehensive, highly persuasive. Read how the key to improving health care in the United States is to convert the patient from a ward of the state to an independent, self-interested customer."
--Milton Friedman, Nobel Laureate in Economics

"Health care costs and insurance premiums are rapidly increasing, making both insured and uninsured consumers worse off...[P]olicymakers are again confronting the fact that change is desperately needed. The direction of that change, however, is anything but settled. Does the solution lie in private markets, greater government involvement, or some combination of the two? Healthy Competition is a timely and important contribution to this debate. The authors argue passionately that markets are the best available vehicle for reforming the health care system. In general, their philosophy is that reform should increase the number of decisions made by patients and decrease the number of decisions made by government officials."
-- Deborah Haas-Wilson, Smith College, in New England Journal of Medicine

"In Healthy Competition, Michael F. Cannon and Michael D. Tanner provide a concise and highly readable summary of the evidence refuting the case against market competition in health care. Cannon and Tanner... provide a valuable service by accumulating the evidence that demonstrates that although health care is not the "same" as personal computers or household appliances, it is not so "different" that market forces cannot work to consumers' benefit." [Read the full review]
--Robert L. Ohsfeldt, Texas A&M Health Science Center

About the Author

Michael F. Cannon is the Cato Institute's director of health policy studies. Michael Tanner is director of health and welfare studies and director of the Cato Institute's Project on Social Security Choice.

Product Details

• Paperback: 140 pages
• Publisher: Cato Institute (September 9, 2005)
• Language: English
• ISBN-10: 1930865813
• ISBN-13: 978-1930865815
• Product Dimensions: 8.9 x 5.8 x 0.5 inches
• Shipping Weight: 8 ounces
• Average Customer Review: 5.0 out of 5 stars  See all reviews (7 customer reviews)
• Amazon Best Sellers Rank: #359,100 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

5 of 6 people found the following review helpful:

5.0 out of 5 stars CJF, March 20, 2006

By 

Charles Farrell (Denver, Colorado) - See all my reviews
(REAL NAME)   

This review is from: Healthy Competition: What's Holding Back Health Care and How to Free It (Paperback)

I enjoyed the book and found it presented a well organized argument for why it is so critical to allow the markets and consumers to experiment with new methods of controlling health care costs and improving access. I also appreciated the author's acknowledgement that health care is a special service that is critically important in our lives. That is what makes reforming the system so challenging.

The book makes clear that market based proposals to reform health care are designed to lower the cost of care and increase coverage. These are proposals that are critical to all Americans.

5 of 6 people found the following review helpful:

5.0 out of 5 stars Extremely important book for an extremely important topic: health care, March 4, 2007

By 

Chuck DeVore "Chuck DeVore" (Irvine, CA United States) - See all my reviews

This review is from: Healthy Competition: What's Holding Back Health Care and How to Free It (Paperback)

"Healthy Competition" by Michael F. Cannon and Michael D. Tanner of the Cato Institute is a critically important book for both those interested in health care policy as well as for every American as we all eventually consume health care services.

Cannon and Tanner's book starts with a foreword by the Hon. George P. Shultz: "We begin with a riddle. What country's health care system offers the best health services in the world, is consistently criticized for not being accessible enough, and yet is so accessible that overutilization is leading to runaway costs?" The answer is, of course, America.

The following 147 pages offers a detailed analysis of what's wrong with American health care (government and insurance industry policies that lead to overuse of medical services) and what's right (the strong remnants of a free market system that encourages innovation, high quality, at an often lower cost). Both detailed and heavily footnoted, but also very readable at the same time, "Healthy Competition" strikes the right balance between a dense academic paper and a clarion call for action.

In concluding the book, Cannon and Tanner write:

"Despite its marvels, America's health care sector continues to present troubling symptoms: excessive costs, uneven quality, a lack of useful information for patients and providers, extraordinary waste, and enormous burdens for future taxpayers. An accurate diagnosis points to too much government influence and too little choice and competition. Proposals to increase the role of government would aggravate these symptoms. More subsidies or controls would drain from the medical marketplace even more of the dynamics that drive other sectors of the economy toward lower prices and higher quality. The only sure remedy is to restore those dynamics to the health care sector.

"Although there are dark clouds on the horizon, we are heartened by the creation and steady growth of health savings accounts. HSAs have already begun to change private-sector health care from within, and will enable a reexamination of the role of government in health care."

The last citation in "Healthy Competition" comes from a June 1, 2004 Harvard Business Review article by Michael Porter and Elizabeth Teisberg. It deals with the oft-heard argument that we somehow should not apply free market principles to the health care sector:

"It is often argued that health care is different because it is complex; because consumers have limited information; and because services are highly customized. Health care undoubtedly has these characteristics, but so do other industries where competition works well. For example, the business of providing customized software and technical services to corporations is highly complex, yet, when adjusted for quality, the cost of enterprise computing has fallen dramatically over the past decade."

Cannon and Tanner accept this argument while also embracing the argument of many of the proponents of government control of health care because it is special and distinct from other parts of the economy - they just come to the opposite conclusion, concluding in their last paragraph, "...Unlike software, wireless communications, or banking, health care involves very emotional decisions, which often entail matters of human dignity, life, and death. However, we do not see the gravity of these matters as a reason to divert power away from individuals and toward government. Rather, we see the special nature of health care as all the more reason to increase each consumer's sphere of autonomy. The special nature of health care makes it all the more important that we use the competitive process to make health care available to more consumers - and makes it all the more important to get started now."

Two side notes of a personal nature: on February 1, 2007, I introduced AB 245, a bill that would allow the tax deductibility of contributions to HSAs (California is one of only four states that do not treat HSAs as tax deductible); and author Michael Cannon is someone I have grown to respect from our first meeting in 2004 as Lincoln Fellows of the Claremont Institute. I suspect we will be hearing quite a bit from Mr. Cannon over the next few decades - and, if policymakers are smart, they will listen carefully to what he has to say.

Reviewer: Chuck DeVore is a candidate for U.S. Senate in 2010, a California State Assemblyman, he served as a Special Assistant for Foreign Affairs in the Department of Defense from 1986 to 1988, retired from the Army National Guard as a lieutenant colonel, and is the co-author of "China Attacks."

7 of 9 people found the following review helpful:

5.0 out of 5 stars Comprehensive Look at Health Care Reform, March 3, 2006

By 

J. Roth (Arlington, Virginia) - See all my reviews
(REAL NAME)   

This review is from: Healthy Competition: What's Holding Back Health Care and How to Free It (Paperback)

I was most impressed that Mr. Cannon does not fall prey to the usual America-good/Canada-bad posturing that categorizes most "debate" over fundamental health care reform. In fact, the authors are nearly as critical of America's health care system (and even of Republicans' stewardship of it) as they are of other countries.

I do agree, however, with Jonathan Cohn of The New Republic that the authors may have been a little selective in their choice of what data to highlight when comparing the U.S. to other countries. All in all, an insightful and immensely readable assessment of America's health care system.