35 of 38 people found the following review helpful
5.0 out of 5 stars The role of prices in health care
The title of this book, "Priceless," has a double meaning: you cannot put a price on good health; and the health care industry does not use prices to ration services the way other industries do. Public health experts and advocates for the poor generally dislike using prices in health care (which economists call "price-rationing") because advocates believe price is a...
Published 17 months ago by D. Herrick
16 of 50 people found the following review helpful
1.0 out of 5 stars Worse than Worthless -
Goodman believes relying even more on free-markets is the cure for our cancerous health-care system. This book provides a sequel to his prior fantasy - health savings accounts' (HSAs) that were also supposed to cure the problem. The most obvious 'fly in that ointment,' confirmed by research findings - low-income people are the ones most likely to be uninsured, but don't...
Published 13 months ago by Loyd E. Eskildson
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35 of 38 people found the following review helpful
5.0 out of 5 stars The role of prices in health care,
This review is from: Priceless: Curing the Healthcare Crisis (Independent Studies in Political Economy) (Hardcover)The title of this book, "Priceless," has a double meaning: you cannot put a price on good health; and the health care industry does not use prices to ration services the way other industries do. Public health experts and advocates for the poor generally dislike using prices in health care (which economists call "price-rationing") because advocates believe price is a barrier to accessing care. Yet, opponents of using prices generally ignore the benefits of the price system. Prices are the perfect mechanism to encourage competition on both price and quality. Price competition allows firms to differentiate their services in customer-pleasing ways. The price system also facilitates consumer-signaling of preferences and priorities in the medical services consumers receive.
The result of a health care system where prices are suppressed is easy to observe: medical inflation is three times the consumer price index; customer service in medicine is abysmal; medical care is also both inconvenient and expensive. Finally, patients without third-party payers (i.e. insurance) find it difficult to discover the price they will be charged prior to care being received and the prices charged often bear no resemblance to actual costs. These all relate to the lack of competition using (real) market-clearing prices.
Another problem of a health care system devoid of market prices is that customer-pleasing amenities that are common in other industries are not common in health care. One of the reasons medical care is so inconvenient is that third-party payers (i.e. insurers, Medicare and Medicaid) have little incentive to make it easy to consume their resources. An example Goodman uses is the telephone. The telephone has been used in all other industries for 100 years. Every doctor's office has a telephone. Indeed, every doctor's office has numerous telephone lines, cell phones, fax lines and internet connections. But patients often cannot discuss their medical conditions with a doctor online or over the phone because insurers have been slow to reimburse physicians for consultations that do not take place face-to-face. Insurers were initially afraid enrollees would abuse the privilege and contact doctors more than needed. Now that research has shown that telemedicine consultations merely replace in-office visits, more insurers are agreeing to pay for them.
Another example used in the book is the development of retail clinics, staffed by nurse practitioners. These clinics developed outside the third-party payment system. Initially, retail clinics (such as MinuteClinic owned by CVS) would not accept insurance. Patients were expected to pay the full cost out of pocket. Many insurers would not reimburse enrollees for visits to a nurse practitioner, without a doctor's order. Once it was proven that these clinics offer both convenience and a good value, insurers began to cover such visits. Yet, the point isn't that insurers were slow to embrace innovative ideas - rather it's why insurers are often slow to embrace innovative ideas. In markets where consumers control their own dollars and prices are used to ration services, suppliers look for ways to attract customers. For their part, when consumers control their own dollars they look for suppliers that provide a good value and have services that meet their needs. This feedback loop is inhibited when prices are suppressed and third-party insurers pay 88% of all medical bills.
One of the most important points of markets where prices are not used to ration services is that if services are not rationed using prices, then services must be rationed by some other means. In health care, the most common method is rationing by waiting, where patients have to wait weeks or months for common services. Or, worse yet, being told they cannot have a given treatment or drug because of budgetary reasons. Both of these methods are commonly used in coutries with nation health insurance systems.
Dr. Goodman does an excellent job putting these very complex ideas into simple, easy-to-understand language. The book is worth reading if you want to understand why much of what we're doing in health care is wrong; and how health care could be improved by concepts that work in just about every other market in which we consume goods and services.
23 of 26 people found the following review helpful
5.0 out of 5 stars Easily the best medicine for health care reform.,
This review is from: Priceless: Curing the Healthcare Crisis (Independent Studies in Political Economy) (Hardcover)Terrific title. The double entendre is not only clever but trenchant. There is no silver bullet. Stopping runaway costs is the only answer. And a real market for health care, one that isn't run by third parties and special political interests, is the only way to stop the rising cost of health care. Everyone needs to read this book, especially Members of Congress,the Obama Administration and Mitt Romney's campaign.
11 of 11 people found the following review helpful
5.0 out of 5 stars 5 stars +. A lesson on the role of *prices*!,
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This review is from: Priceless: Curing the Healthcare Crisis (Independent Studies in Political Economy) (Hardcover)Thanks to Reason magazine for pointing out this book for me.
Why did it take so long to write this book? Everything in it seems perfectly obvious. Maybe some supplementary reading is necessary for those who have not read up on the role of prices. A single chapter out of Basic Economics: A Common Sense Guide to the Economy should do. Or, alternatively one could read Basic Economics: A Common Sense Guide to the Economy/ Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics as companion texts to this. (They're all such good texts that it couldn't hurt to read them.)
Goodman does talk about this not just as a theoretical issue, but in comparison to the experience of other countries. (There are lots of other countries out there that have tried many different things.) Why not just study the results of some other countries? Singapore? (The government pays a minimum amount and if you want more than that you pay it.) Hong Kong? (Government and private hospitals are side by side. The latter keeps the former honest and provides more consumer choice.) Mainland China. (More of the same. But cash prices form 95% of all transactions and so there is no waiting.) At loc 661 he says that it is a property of complex systems that they can't be copied. But if that were true, there would be no point in setting up central banks in other countries.
Some things were very well thought out. Or, I should say that they are things that all health care experts know that they have not managed to make the public understand. Discussion on the fact of the doctor as an agent of the patient vs. agent of an insurance company. Adverse selection in insurance market. Adding millions of people onto doctor rolls without increasing the number of physicians. The fact that health care is an economic good (with actors who respond to incentives and who can/ will respond differently to different incentives) and should be treated as such.
As the book goes on, it seems to be more an expanded discussion of the role of prices with appropriate and abundant restatement of the single fact that people will not get value for their money when they are not paying the full price of things. So, if you pay for the first $50 of a $5000 treatment, then that is exactly what the treatment was worth to you. $50.
He pours cold water on people who are always deriding the US healthcare system in terms out outputs per unit of input by asking some philosophical questions. (If no one pays sticker price for anything, then what does it mean to speak of the price of inputs? Do you use the price at the point of service or the price calculated downstream?)
There are lots of very bad pieces of legislation-- and they were passed before the Affordable Care Act, but the ACA took bad legislation and made it *worse*. Goodman gave us some example of specific pieces of legislation.
Goodman provided some clarification on the definition of what is insurance. This is something on which politicians have equivocated. Insurance is one thing (in the sense that people buy it for cars and houses). Prepayment for routine illnesses is another. He also cleared up that the US "system" is not one single thing, but a series of overlapping entities.
Lifted the curtains on the failure of Romney care (and why it is a bad idea to scale up) by actually putting out some data. Romneycare has come up again and again in this (soon to be over) election season, but no one has bothered to find out what were the results of the legislation. For example: If people don't accept your form of payment--Medicare-- (because reimbursement rates are too low), that can actually go against the purpose of a national health plan. If you increase the number of patients with no corresponding increase in providers, *what do you think will happen*? Health insurance deals with micromanagement. Car insurance deals with absolute costs. Housing insurance, too.
There was a bit more advanced discussion of the economic incentives facing hospitals. Some of that might go over the heads of many readers. But there was just so much good information in this book that even if the reader is only able to get 20% of it, it would justify the time/ cost spent on reading this. In point of fact, there is enough information here to cover at least a 3 credit hour course over a full semester. And possibly two semesters, if done properly. Much too much for an amateur to absorb.
Toward the end, Goodman got into the details of Obamacare (Affordable Care and Patient Protection Act). This is an extremely complicated piece of legislation. It was written before the bill was taken to the Supreme Court and before some provisions of the bill were overruled (Medicare/ Medicaid severability and the fact that the penalty is to be treated as a tax), but even from way before that time the author predicted some problems. A lot of problems. The chapter is really overwrought with detail, and it cannot be well understood be anyone other than a specialist. The take away message seems to be that: 1. Overly complex legislation can have a lot of unintended consequences; 2. It really would be easier to just have cash prices and let the market prices set themselves.
Verdict: Highly recommended. Worth the time. Worth the money.
7 of 7 people found the following review helpful
4.0 out of 5 stars Superb and authorative,
I have so many notes and highlights in my Ipad edition, that it would take me a short book to review them all. He articulates with much clarity how very different health insurance is from other forms of insurance, and how this works to the detriment of both providers and patients. At times the charts and graphs made my eyes glaze over, but no one can accuse Goodman of not documenting his point of view or of not offering alternative suggestions.
Even for the lay person who is trying to grasp this complex and tortuous subject, this is a fine work. The book was however published prior to the Supreme Court's June decision affirming Obamacare, and in this sense, there is some closure lacking.
However, all in all, this is a fantastic work and an honest attempt to look at where we are, how we got here, and a better way to improve.
7 of 8 people found the following review helpful
5.0 out of 5 stars "Priceless" is indeed Priceless: A Must-Read for Politicians and Voters,
Goodman's new book is based on four new insights for improving health care at lower cost: (1) The "importance of liberating doctors" because "our health care crisis ... can only be solved from the supplier side." (2) The importance of prices. When third parties establish price controls, "we forbid enrollees to do the one thing that would expand access to care." (3) "Making it illegal for insurers to charge premiums that reflect real risks" has created counterproductive incentives to avoid high risk patients. and (4) There is "an emotional predisposition" against allowing "prices ..to allocate resources in the market for medical care," and this has taken us down a path full of wrong incentives, complex regulations, high administrative costs and countless opportunities for fraud and abuse. Rather than having government bureaucrats try to manage 18% of our economy and freezing us into a system that doesn't work, Goodman offers us specific recommendations to free up suppliers to innovate and create new approaches to health care delivery that would both improve quality and provide more effective cost control.
For me, a businessman who has had to work hard and constantly innovate to try to please customers who do not have infinite amounts of money, the most important new element in this book is the recognition that our individual "freedom to choose" is not the primary objective in health care reform. "Freedom to choose" is, however, a necessary prerequisite condition which must exist if we are to accomplish the real objective of health care reform: Liberating providers to achieve break-through innovations that will create and deliver better health care at lower cost.
The best justification for reading "Priceless," is contained in the chapter on health care in Peter Schiff's new book, "The Real Crash: America's Coming Bankruptcy---How to Save Yourself and Your Country." Schiff analyses the faults and perils in our current health care system, how we got to this point and where we are headed, with great simplicity and clarity.
14 of 18 people found the following review helpful
5.0 out of 5 stars About Time,
Now John Goodman has written a similar book for health care. Goodman understands real people and what drives them, and he writes, not like the economist he is, but as a reporter who is interested in communicating ideas. The core idea is that all of the "urban planners" of our health care system have a utopian vision of health care that is contrary to the needs and demands of real patients, real doctors, and everybody else who is trapped in this ghetto.
Not only is their vision wrong in theory, it has been proven wrong over fifty years of practice. Everything these planners have tried for fifty years has failed and actually made conditions worse than they were before.
The timing of this book could not be better as we launch into yet another round of health "reforms." It is time to take health care back from the Utopians and revise it to meet the needs of people.
3 of 3 people found the following review helpful
4.0 out of 5 stars Prices versus Regulation,
There are some unanswered questions in this book. Goodman notes that health care "experts" abhor the use of prices to coordinate the health care industry. Why? Goodman is not clear about this, but if prices are the answer we must find out how to cure the phobias that many people have to the price system. I think there are also some unresolved issues about the pricing of capital investment in heavily regulated industries- but this is a tricky issue- Priceless is complicated enough in its present form. This one book should not try to answer every issue.
The worst thing I can say about this book is that there were a couple of passages where Goodman might have overstated his case. There were several paragraphs where I thought he had demonstrated plausibility for his case, but went a step further in claiming proof. This is not that big a deal, its just my opinion. Read Priceless and learn.
3 of 3 people found the following review helpful
5.0 out of 5 stars Thoughtful overview of what is wrong, and what is right, with American health care,
5 of 6 people found the following review helpful
5.0 out of 5 stars Demonstrates Some of the Best Understanding of Issue and Solution I've Read,
Though he gives a few light brush strokes, he like most, greatly underestimate the extent to which the provider side especially the would be leaders, the physicians, are shackled with reams of regulation and indentured by hospital cartels and insurance oligopolies. If physicians are not liberated reform of insurance alone will not achieve what should be the goal of all healthcare reform proposals, long term health of the individual and the population, which in turn is the only way to save money in healthcare.
14 of 19 people found the following review helpful
5.0 out of 5 stars Definitely worth the read,
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Priceless: Curing the Healthcare Crisis (Independent Studies in Political Economy) by John C. Goodman