Unfree the Market!

I just attended the annual meeting of the Rhode Island Minority Health Advisory Commission. Dr. David Gifford, the outgoing Director of the Department of Health, offered an amuse-bouche which goes well with the menu here.

Hospitals have a volume based business. They get paid to do stuff, which means they make more money when the people in their market area are more likely to be sick and injured. They lost money with the milder than usual flu season last year. (Sorry Greg Dworkin, but that's what happened. And Dr. Gifford ought to know.) This year, with all the snow and ice, they're doing well, because X-rays and orthopedic services are profitable.

So, you don't see them out there spreading salt on the sidewalks to keep the old folks from slipping and falling. Gifford says that as far as he knows they aren't spraying water on the sidewalks at night, but their business model says that's what they actually ought to be doing. For the price of a few hip fractures -- which can mean long-term care in a skilled nursing facility and many tens of thousand of dollars or more -- we could prevent a whole lot of falls instead. But nobody has any financial incentive to do that. We need a radically different financial structure that rewards achievements in public health, not having more broken people around so hospitals and doctors can get paid to try to fix them.

Let your imagination run wild.