Health Care Reform and

'Market Forces'

(America, April 16, 1994, 6-7)



The competing plans for reforming the health-care system all attempt, among other things, to control spiraling costs. In one way or another they all assume that "market forces" will bring costs down, if only we can find the operational mechanisms that will lead us to that Holy Grail known as "an even playing field." It will not work. At least it won't work under the prevailing understanding of "market forces." Some vignettes may make the point.

Story #l: Because of a chronic condition, I go regularly to a local blood bank to have my blood drawn. Till recently this was done in a modest, almost antiquated --- but serviceable --- building. More modern quarters were being built. And more modern they have surely turned out to be. The chrome and frosted glass in the new center would rival most upscale hotels. One fellow-client in the waiting room commented: "I'd love to be able to afford that kind of wallpaper," while one of the nurses said: "They've got money to build a building like this but no money to give us raises." Nothing really changed in the area where the blood is actually drawn. Clients get basically the same level of service as before.



It turns out that the building was really constructed for a physicians' group and their prestigious image, not for the clients. It might as well be offices for a group of, well, lawyers.



Story #2: An organizational consultant with a successful history of helping nonprofit groups at $80 an hour is told by an executive of a large hospital chain: "If you want to work with us, you'd better charge at least $125 an hour. That's the going rate for consultants in this field. If you charge less than that, they will think you mustn't be worth much; they won't even let you get your foot in the door. They'll pay attention and presume you're competent if you charge at the higher rate."



The assumption behind the argument that level-field "market forces" will drive down costs is that dollars are the compelling, if not the sole, market forces. Given two H.M.O.'s offering comparable services, the less costly one will win.



Real life is more complicated than that.



The utilitarian view of market forces overlooks another whole set of far more compelling drives that shape markets. They are cultural rather than directly monetary in nature. And cultural transformation is not accomplished through economic incentives alone.

The medical group in the first story was not driven to build the glitzy office complex either by the intention of providing better service or solely by the hope of higher monetary return through more competitive pricing. Nor is the hospital in the second story, which pays for the higher-priced consultant, motivated by those incentives. Both act the way they do because they are part of a culture that tenaciously teaches all of us that more expensive is better. Each wants to look good in comparison either to other physicians' groups or to the competing hospital.



In the case of the hospital, looking good is even referred to as the "hotel" side of hospital budgeting. Patients are more likely to use the services of a hospital providing amenities that another hospital cannot. In the abstract the argument has some validity. No one wants to be depressed by the bile-green waiting areas of a previous era. In the concrete, however, it results in the same lavish expenditures for external appearance that might characterize competition between a Hyatt and a Helmsley, all of which end up on the patient's bill.



A further cultural factor will outweigh the directly financial component of market forces. It is wrapped up in America's love affair with technology. Hi-tech is better. Do an M.R.I. test even if you are not in doubt. The patient will feel more secure. And the providers will cover their exposed derrieres.

Which prompts story #3: A friend gave birth to a baby boy. She and her husband saw this healthy baby in the delivery room. A few hours later, without any antecedent signs, the baby died. My friend was appalled at the number of her friends who spontaneously said, "Sue the doctor!" Her reflection was: "This man has been totally caring for us. He was personally devastated by this, breaking down in tears. There are some mysteries we can't explain. I still trust and believe in him. Am I going to destroy that relationship by suing?"



Which reveals yet another deeply embedded cultural attitude working against the power of sheer monetary incentive: If something untoward happens, sue the bastards. America is a litigious culture. Merely capping the potential awards for medical malpractice, even if it can ever be accomplished, will not diminish our cultural penchant for refusing to come to terms with human frailty. Our cultural system resists the demanding discipline that might be involved in developing effective screening and supervising measures to prevent human error or overt malpractice before it can occur. Instead, we prefer as a people to expend our resources on litigation after the misdeed has occurred (just as we prefer to build prisons rather than use our resources to build healthier families and neighborhoods so that the occurrence of criminal behavior might be diminished).



Deeper even than these three strong cultural biases is the refusal to accept death as a part of life. Whole books have been written on our denial of death. The point here is that this powerful psychological (and spiritual) reality will continue to drive the expenditure of huge outlays of money for technology whose sole return is the continuation of a merely biological existence. The case for lowering overall costs and therefore being able to lower insurance premiums is as fragile as a sand castle before the tidal wave of emotional power demanding that Grandma's life be prolonged no matter what its quality or what the cost to our neighbors in the health-care buying alliance.



These are not arguments against the efforts to control costs through free-market competition. Every step we can take to make economic incentives, and therefore competi-

tion, real is a help. But we are kidding ourselves if we think that such steps alone will do the job of reining in costs. Costs will not really come down until the health-care consumer demands fewer outlays aimed at keeping up with the Trumps, challenges the resort to unnecessary and costly technology, suppresses the urge to look for monetary revenge for every failure on the part of medical caregivers and is prepared to challenge the continued maintenance of biological life as an absolute value.



Ultimately cultures create markets more fundamentally than finances do. In any social reform, the transformation of cultural messages is the real agenda. In their encyclicals on evangelization, both Paul VI and John Paul II have called the church to realize that the spread of the Good News requires not only the affirmation of the good in every culture but also the critique of its shadow side. That requires the church to challenge those underlying assumptions that lead each culture, in its own unique way, to squander the limited resources of our earth on misguided choices. In the arena of health care reform, this just may be the appropriate evangelizing role for the church.

Challenging deep-seated attitudes is a lot harder, admittedly, than tinkering with economic incentives. But it is the stuff of conversion. And isn't that what we are supposed to be all about?