Health Management

The free market in health care will probably work a lot like the free market in college tuition and CEO salaries. But that probably doesn't matter to ideologues who learn about the market from a textbook rather than the real world. I expect to see many people touting a free-market solution to health care between now and November.

In theory, the free market should work, of course. But one reason the free market works reasonably well in the field of, say, televisions, is that you can return one you don't like and get a better one. The penalty for a bad decision is all on the seller (and could explain why store return policies are becoming stricter - returns are just one more place to control costs).

However, it is far more difficult to return a college education or a hip replacement. In fact, when it comes to the hip replacement, a botched job will only add to the costs, not to mention the pain.

Information will help the health-care consumer? I suppose, but consider all the sites ranking various televisions. There's a ton of information, yet some people still end up disliking whatever set they buy.

One solution in health care might be to ramp up consumers' ability to sue doctors and hospitals, as a means of instilling discipline. But the argument there goes mostly in the opposite direction: to free doctors from lawsuits and curtail a patient's legal remedies.