Friday, July 17, 2009

Agency problems cut you either way

[A] commission appointed by the [Massachusetts] governor wants to move in a new direction: capitation. That's when the state pays providers a fixed amount for each person (in the plan, or in their practice) and lets the providers figure out how to treat them. ...

I don't like a system where the doctor has a financial incentive to give me unnecessary tests. But I'm even less fond of the idea of giving her financial incentives not to give me necessary ones.

I predict this lasts about half a news cycle before the public outrage overwhelms state legislators, who start screaming for the heads of the traitorous, heartless bastards who suggested it.
--Megan McArdle, Atlantic Monthly, on why it's hard to move away from fee-for-service healthcare

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