You get what you pay for

Don Boudreaux quotes Tom Miller on Medicare (emphasis mine):

Aside from the basic numbers of budgetary imbalances and continuing fiscal pressures, Medicare’s institutionalization as the dominant payer in US health care also has locked in the worst features of a costly and inefficient fee-for-service delivery system that still rewards providing more volume, instead of better value, in most health care decisions.

Well said. That’s something to think about.

1 thought on “You get what you pay for

  1. It seems that when something is subsidized by a third party, volume is bound to go up and quality is bound to suffer. When the supplier looks to the third party subsidy for payment rather than the demander (sorry if I tend to use econ term), he supplies what the third party is paying for, i.e. volume rather than quality (which is so, so hard to accurately measure and which varies with each individual. The same happens even when the subsidy is given to the demander as the demander faces less consequence if he buys a poor quality item – he can always just buy more (with OPM).

    The ONLY way to fix the problem of prices, volume and quality so that they are what consumers really want, i.e what they value, is to eliminate the government from the equation. It’s as simple (as in uncomplicated) and difficult (as in politically unlikely) as that.


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