Must Read Op-Ed on Healthcare Economics

There is a must read opinion piece today in the WSJ by a Dr. Robert Swerlick, a professor at Emory's School of Medicine. Dr. Swerlick highlights a major flaw in our healthcare system that goes largely unnoticed, but it is a big one. The flaw has nothing to do with the usual talking points of 'affordability' or 'quality' per se. Rather, it has to do with appropriateness and availability of specific disciplines of care. Dr. Swerlick illustrates this right off the bat by showing how easy it is to get a veterinarian compared to an endocrinologist. Current policy has subverted the price system, thus distorting the information content that prices convey. Do we need more cardiologists, less podiatrists, or what? True prices would tell us where medical talent and training is most needed, but we don't allow true prices to form in large parts of our healthcare system today. That is why we have a surfeit of sports medicine practicioners and a dearth of more critical care experts like obstetricians and, as the author points out, endocrinologists. Is tennis elbow really a more critical need for our medical system to focus on than diabetes or neo-natal health? The result is we are not getting the right amount of young medical talent focusing on the health problems that are most pressing to society. Furthermore, we are creating needless shortages of doctors in critical fields. Shortages mean higher prices. No matter how desperately the government or the insurance industry try to contain costs, the supply and demand imbalance is insurmountable, prices will rise. Anything other than correcting the imbalance can only be a temporary and ineffective solution.

True prices that reflect supply and demand and convey valuable, accurate market information need to be allowed to flourish in our healthcare system if we are to get appropriate and affordable care over the long term.