Priceless: Curing the Healthcare Crisis (Independent Studies in Political Economy) [Hardcover]

John C. Goodman (Author)

Book Description

Publication Date: June 1, 2012 | Series: Independent Studies in Political Economy

In the groundbreaking book Priceless, renowned healthcare economist John Goodman reveals how patients, healthcare providers, employers, and employees are all trapped in a dysfunctional, bureaucratic, healthcare system fraught with perverse incentives that raise costs, reduce quality, and make care less accessible. Unless changed, these incentives will only worsen the problems in the coming months and years. He demonstrates how market forces have been driven out from the American healthcare system, making it nearly impossible to solve problems as effectively or efficiently as in virtually every other type of consumer marketplace. Goodman cuts through the politics to think "outside the box" and propose dozens of bold and crucial innovations that, if adopted, would enable caregivers, entrepreneurs, and patients to use their knowledge and creativity to create access to low-cost, high-quality healthcare.

Editorial Reviews

Review

"John Goodman has long been the clearest and most insightful healthcare thinker we have . . . it's time we acted on his common sense, fact-based wisdom in Priceless."  —Mitch Daniels, Governor of Indiana

"There's no question that today's healthcare system is littered with distorted incentives and what John Goodman calls dysfunctionality. Priceless is a call to arms to do something about it."  —Peter R. Orszag, former Director, Congressional Budget Office

"John Goodman, widely known as the father of health savings accounts, is as provocative and controversial as ever in his book, Priceless . . . interesting for all who have been frustrated in their search for a workable solution to our healthcare woes."  —Gail R. Wilensky, former Administrator, Centers for Medicare and Medicaid Services

"I have been following John Goodman's health policy ideas for as long as I’ve been on Capitol Hill. John's latest effort, Priceless: Curing the Health Care Crisis, makes it abundantly clear why he is a source of wisdom, insight, and innovative thinking."  —Paul Ryan, Chairman, U.S. House Budget Committee

"If liberal commentators wish to sharpen their claws, there is no better stone on which to do it than John Goodman's book Priceless.”  —Uwe E. Reinhardt, James Madison Professor of Political Economy, Princeton University

"Priceless provides fresh and original insights to help steer us into a system that harnesses individual choice, aligns price and quality, and more effectively utilizes financing to achieve these ends."  —June E. O'Neill, former Director, Congressional Budget Office; Wollman Distinguished Professor of Economics and Director of the Center for the Study of Business and Government, Baruch College

"Priceless is an important contribution to a market-friendly approach to reforming healthcare."  —Martin S. Feldstein, President Emeritus, National Bureau of Economic Research; George F. Baker Professor of Economics, Harvard University

"John Goodman's terrific book Priceless . . . offers a breath of fresh air in a tired healthcare debate that demonstrates once again that markets enjoy their greatest advantage in complex settings that call for imaginative solutions that no government-driven system can deliver."  —Richard A. Epstein, Laurence A. Tisch Professor of Law, New York University

About the Author

John C. Goodman is a research fellow at the Independent Institute and a Kellye Wright Fellow in Health Care at the National Center for Policy Analysis, of which he is president. He is the author of more than 50 studies on health policy, retirement reform, and tax issues, as well as nine books, including Leaving Women Behind: Modern Families, Outdated Laws; Lives at Risk: Single Payer National Health Insurance Around the World; and The Patient Power: Solving America's Health Care Crisis. His articles have been featured in publications such as Health Affairs, National Review, and the Wall Street Journal. He lives in Dallas, Texas.

Product Details

• Hardcover: 392 pages
• Publisher: Independent Institute; 1 edition (June 1, 2012)
• Language: English
• ISBN-10: 1598130838
• ISBN-13: 978-1598130836
• Product Dimensions: 6 x 1.3 x 9 inches
• Shipping Weight: 1.6 pounds (View shipping rates and policies)
• Average Customer Review: 4.2 out of 5 stars  See all reviews (25 customer reviews)
• Amazon Best Sellers Rank: #152,064 in Books (See Top 100 in Books)

More About the Author

John C. Goodman is President of the National Center for Policy Analysis, Research Fellow at the Independent Institute, and author of Priceless: Curing the Healthcare Crisis. The Wall Street Journal and the National Journal, among other media, have called him the "Father of Health Savings Accounts." He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system.

Dr. Goodman's health policy blog is the premier right-of-center health care blog on the Internet. It is the only place where pro-free enterprise, private sector solutions to health care problems are routinely examined and debated by top health policy experts throughout the country-conservative, moderate and liberal.

Goodman regularly appears on television and radio news and talk programs and authors editorials on economic policy issues. He regularly appears on the FOX News Channel, CNN, FOX Business Network and CNBC. He's also appeared on the Lehrer News Hour (PBS) and was a debater on many of William F. Buckley's Firing Line programs. Goodman also regularly contributes columns to The Wall Street Journal, Kaiser Health News and other national publications.

Dr. Goodman also was the pivotal lead expert in the NCPA's grassroots public policy campaign, "Free Our Health Care Now," an unsurpassed national education effort to communicate patient-centered alternatives to a government-run health care system. The initiative resulted in the largest online petition ever delivered on Capitol Hill.

He is frequently invited to testify before Congress on health care reform and retirement topics and is the author of more than 50 published studies on topics such as health policy, retirement reform and tax issues and nine books, including Lives at Risk: Single Payer National Health Insurance Around the World; Leaving Women Behind: Modern Families, Outdated Laws; and the trailblazing Patient Power: Solving America's Health Care Crisis, the condensed version of which sold more than 300,000 copies.

A native of Waco, Texas, Goodman became interested in economics and classical liberal ideas while an undergraduate at the University of Texas at Austin, where he became vice president of the student body. He is a crossword puzzle aficionado, and most days he is able to conquer the puzzles in The New York Times in ink.

Goodman received his Ph.D. in economics from Columbia University, and has taught and done research at Columbia, Stanford University, Dartmouth University, Southern Methodist University and the University of Dallas.

Most Helpful Customer Reviews

30 of 33 people found the following review helpful

5.0 out of 5 stars The role of prices in health care June 20, 2012

By D. Herrick

Format: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.

22 of 25 people found the following review helpful

5.0 out of 5 stars Easily the best medicine for health care reform. June 18, 2012

By R. Walker

Format: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.

9 of 9 people found the following review helpful

5.0 out of 5 stars 5 stars +. A lesson on the role of *prices*! November 4, 2012

By Lemas Mitchell

Format:Hardcover|Amazon Verified Purchase

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.