I hate to be the one to break it to conservatives, but there are no free market solutions to America’s healthcare problems. Free markets exist when purchasers have the ability to make informed choices. If widget maker A makes a better widget then widget maker B and sells it for the same price, consumers will eventually choose widget A. Widget maker B will have to lower its prices, improve its quality or go out of business.
Patient care is not like widgets.
Purchasers of health care services have no accurate way to compare health care providers. The most commonly used measures of quality are dependent more on the provider's ability to convince patients to do what they should than they are on the actual care provided. An example of this is colon cancer screening. There is no effective way to measure the skill of physicians providing colonoscopies, so insurers instead measure screening rates. I know of a physician who screens for blood in the stool based on office exams, in direct conflict with the recommended testing protocol. He knows this is not as accurate, but he doesn’t care. He has the highest rate of colon cancer screening in his medical group, and gets a large bonus as a result. His quality is low, but his quality ratings are high.
Hospitals are similarly motivated to meet inaccurate metrics. One of the most important complications on which hospitals are measured is ventilator associated pneumonias. Patients on breathing machines are already seriously ill. If they get pneumonia while on a ventilator mortality rates increase dramatically. It makes sense that hospitals be given incentives to develop policies to improve outcomes by preventing these infections. As a significant amount of money is tied to this quality measure hospitals have aggressively searched for ways to lower the complication rate. Many hospitals have found an easy way to improve their scores. When ventilator patients get pneumonia, they call it something else. Voila! No more pneumonia. Patients still get sick, but hey, the hospital numbers look great.
Inaccurate quality measurements are a major problem that has not been addressed by Obamacare or any of the other proposals currently put forth. We live in a world where looking good at times pays better than doing good. Insurers, hospitals, medical groups and physicians are all looking for ways to improve their bottom line. Most are trying to do a good job taking care of patients but good care is not a guarantee of financial success and institutions that don't succeed financially can't help anyone.
If we are ever going to reach a solution for our healthcare problems we will need to begin by making sure that incentives are aligned with patient outcomes. The best way to do this is by establishing systems where keeping patients healthy leads to the highest profits. There is no perfect system, but any good solution will need to make patient health the key to success.