I have been explaining the "capitalism is only efficient if the incentives are aligned with what is best for society" concept a lot lately in the healthcare debate.
If the industry got paid for making people healthier, we would be much healthier.
They are currently paid for treatments performed, based on price.
Thus they optimize for lots of expensive treatments.
There is a correlation between lots of expensive treatments and health, but not a direct one. The only direct result is higher spending on health care.
If we paid for outcome, healthcare would undoubtedly be cheaper, and probably better as well.
I can't agree with you more. How can we implement such an incentive alignment?
It's quite hard. Yes, true health care should be preventive, but this also means money is paid before any health problem occurs. Yet the general public are reactionary consumers. Why would they pay when they are still healthy?
If the industry got paid for making people healthier, we would be much healthier.
They are currently paid for treatments performed, based on price.
Thus they optimize for lots of expensive treatments.
There is a correlation between lots of expensive treatments and health, but not a direct one. The only direct result is higher spending on health care.
If we paid for outcome, healthcare would undoubtedly be cheaper, and probably better as well.