David Goldhill^• begins Catastrophic Care^• by saying “I’m a Democrat and once held views about health care common in my party.” He isn’t lying: he is far to the left in his worldview: businessmen are evil and exist to screw the average person. But he is also a businessman, so he recognizes that even the evil businessmen have an incentive to not screw the average person, and that these incentives don’t exist in the health care industry:

Every business would like to get away with high prices, poor quality, and miserable service, but this behavior carries an unacceptable cost: lost customers, lost revenue, lost profits. In health care, bad behavior doesn’t produce these bad results; bad behavior is often rewarded with additional revenue, and efficiency is penalized with less.

As a leftist, he idolizes health care businessmen above other businessmen; as a businessman, he recognizes that they respond to the same incentives other businessmen do.

All of the actors in health care want to serve patients well, but understandably most respond rationally to the backward economic incentives baked into the system.

In fact, quite a few businessmen started their business to provide a service, and many, despite all of the regulatory incentives to not do so well, still strive to provide good service.

His dual, almost dissociative, worldview causes him to make extraordinarily conflicting sentences:

In a system burdened by complexity, bureaucratic explosion, and lack of innovation, the ACA paves the way for even more rules, many of which are merely mandates for future rules and ever more committees and commissions. The problem with the ACA isn’t that it represents “government takeover of health care” or “socialism” or even the famous but nonexistent “death panels.” The problem with the ACA is that it’s so old-fashioned.

The problem with the ACA, in other words, is not that it’s old-fashioned. It’s that it’s old-fashioned. Top-down, government controlled, filled with committees and commissions to determine what life-saving care will be allowed, that’s what old-fashioned means. But as a leftist, he can’t quite get to admitting that socialism is an old-fashioned solution.

He seems to have not bothered to understand the Conservative view at all, and he goes out of his way to fight for the straw-men of the left. For example, he never says what he thinks the term death panel refers to; he does, however, say that they are nonexistent. But then he writes that the ACA’s government-controlled health care will run up against limits; he writes that those limits will be managed by committees; he writes that those committees will choose what procedures and care will exist. That’s what the term death panel refers to.

His leftist worldview forces him to come up with a big-government solution to the issue of health care and health insurance, despite his extraordinarily well-written compilation of the evils of big-government solutions. Even though his experience tells him that government-controlled health care by its nature drives up prices and drives down quality, he still prefers to believe government bureaucrats when they tell him otherwise. It is darkly humorous to be reading this paragraph now, in 2014:

Some people believe government is inherently incompetent. I don’t. The hospital system run by the Department of Veterans Affairs, which directly serves a large population on a limited budget, has been a consistent leader in using electronic records to coordinate patient care and in reducing hospital-acquired infections. The VA has its flaws, but it has built a distinctive business model to serve its patients.

Turns out, the VA’s distinctive business model involves using the malleability of electronic records to fudge wait times to the point that veterans die before they receive care.

There’s another adjective for that business model: corrupt. It’s the natural evolution of an organization with little to no oversight that controls both its product and its ratings for delivering that product. Goldhill knows this. And he still lets the bureaucrats lie to him, offering a solution in which the government is in full control. His solution is undoubtedly better than the “Affordable” Care Act, but we should set our sights higher than that kind of massive cronyism.

When Goldhill writes from his experience, he is conservative. For example, it’s hard to get more conservative than

We will be treated as good customers only when we are actually writing the checks, rather than having someone else do it for us.

and

At some point, we will have to decide whether our attachment to the idea of helping people is more important than actually helping them.

But when he offers his solutions, he goes back to the left. Underlying his argument is that health care can only become competitive if it must compete not just with other health care but also with non-health care. He talks about the tradeoffs involved in spending on one thing leaving less for spending on other things. But his dream systems all involve money that can only be spent on health care. Even his proposed insurance plan is government-run, with all the mission creep that entails. His TruCat even involves the government setting prices, something the businessman side of him says is one of the greatest drivers of increased prices and decreased quality in the current system.

As a businessman, he has common sense; he attacks head-on the myth that technological advancement means prices inevitably increase.

Today, I withdrew cash at an ATM and paid bills online, saving myself considerable time by not having to stand in line at the bank, as well as the expense of envelopes, stamps, and gas to get to the post office. I call my wife, who was visiting her parents in rural Russia, for five cents a minute. I used a free application on my phone to find a good Italian restaurant, reserve a table, and provide me with a map and directions to get there. At work, I participated in a four-city video conference (the total cost for the hour was $50—significantly cheaper than flying everyone to one location). I microwaved some leftovers in an oven that cost less than a tank of gas. I watched a movie on my $40 DVD player and a baseball game in high definition on a large screen TV that I bought this year for a third of what I paid for one of the same size five years ago. I finished my day sitting down to write this chapter on a $1,200 laptop that has two thousand times the processing power of the first desktop computer I bought—for three times the price—in 1989.

I did something else today: I read yet another article explaining that technology is driving up the cost of health care and will continue to do so for a long time.

The policies that Goldhill outlines, which the ACA takes to extremes, all keep health care on an “island” where everything gets reversed. He continually compares the island of health care to the “mainland” of normal businesses.

One of the arguments against taking health care off the island is that consumers aren’t going to go out searching for the health care they want at the price they want, like they might for a TV set. But this ignores completely how industries work on the mainland: they advertise their specialties, their prices, and what sets them apart from their competitors.

All a consumer has to do is choose, because in a consumer-driven economy the producers and sellers chase consumers, not the other way around.

Island residents misunderstand marketing because they view it as a wasteful expense. But on the Mainland, marketing revolves around two questions essential for a business to serve customers well: Why should a consumer use my service? And how do I convince him to? Answering those questions means making a promise to consumers and then living up to it; that’s what creates real discipline in any business…

When your city’s safest hospital advertises its successes on highway billboards, all hospitals in your city will kill fewer patients.

Causing prices to rise through bad policies, such as the ACA, have real costs elsewhere. Because we all pay for their failure through taxes and increased premiums, money we could have spent on other things or saved for the future instead goes to the crazy island. And it’s a lot of money.

Say, for example, that health care costs had only grown at the rate of the general economy over the past forty-five years—a modest rate compared with health care’s actual growth. If such savings were spread equally over the population, the average American would have an extra $4,000 to spend on other things this year. That’s $16,000 for a family of four. Per year. One way to understand the burden of health care spending is to think about what you could have done with that money—what else would you have bought or invested in?

I’m increasingly inclined to think that Medicare/Medicaid enrollees should simply be given the money that their recommended checkups, tests, and treatments will cost according to the cost tables, and then they can choose whether to spend that money on the health care (using the same price Medicare does now) or on quality-of-life—or on some combination. Health care providers would not be allowed to force the patient to take their advice; all such contracts would be legally unenforceable and felonies.

Health care providers would be allowed to charge less, but not more, than they currently get paid when paid directly by the government. Then, tie the annual cost tables to whatever patients are ultimately charged. Not that this would be a best of all worlds solution, but it would be a doable solution with relatively minor changes to the current system. That is, if the current system works at all, this system would work better.

This would mean that health care providers would need to chase the patient, so to speak, would need to convince the patient that the procedure is worth that money. It would require, however, respecting other people’s choices. It would require letting people choose lifestyles that don’t prioritize health over quality of life.

That’s the kind of solution that it looks like Catastrophic Care is leading to when Goldhill speaks from the mainland; despite his tendency to go to the island of the left, this book is well worth reading. He describes the problems of our current system clearly, and clearly identifies why the current system causes higher prices and lower quality. His experienced half knows what solutions will work, even if his island half refuses to take that experience into account.