Archives for March 2010

In a recent column on health care, Thomas Sowell writes:

It is not uncommon for patients in those countries to have to wait for months before getting operations that Americans get within weeks, or even days, after being diagnosed with a condition that requires surgery. You can always “bring down the cost of medical care” by having a lower level of quality or availability.

That last sentence is very illuminating. You will notice the same pattern that I blogged on in regard to project management a few weeks ago. In that post, I noted that there are three constraints on anything — cost, quality, and time — and you can have two but not all three. If you need something cheap, then you will either have lower quality or a longer schedule. If you want something fast, you will either have lower quality or higher cost. And so forth.

This reality exists in health care as well as project management; it exists anywhere that you have to utilize resources. So, in regard to health care, Sowell notes that many schemes to “bring down the cost of medical care” do so by decreasing quality or increasing the time it takes to get scheduled for important surgery and care. Yet, these schemes often talk as if there is no trade off.

We ought not talk about these things as though we are operating in an unconstrained world, as though having the government step in will magically result in cheaper health care, with the same standard of quality and the same speediness of implementation.

Now, I do think it is possible for health care to get cheaper while preserving excellent quality and timeliness. We have seen this happen, for example, with computers (and technology in general) — costs have gone down, while quality and performance has gone up, and you don’t have to wait in a breadline to get one.

But how did that happen? Through innovation. The cost of health care can come down — while preserving quality and timeliness — through innovation. The question then becomes: what environment is most conducive to motivating the innovation necessary to do this?

It doesn’t come from the government. Notice, again, the tech industry — it is not governmental controls that led to the creative and risk-taking entrepreneurship behind the creation of Apple, Google, and the thousands of other companies (even Microsoft) that have transformed our lives through technological improvements. Rather, it was the opposite — letting them be free to create, pursue, fail, regroup, and make things happen.

I don’t know why it is so hard to learn this lesson. We see it every day, and now the Internet itself is one of the best examples of it — it is through decentralization that society advances, not centralization of government power over an industry.

The greatest irony is that many of the people who get this when it comes to the tech industry, the Internet, and entrepreneurship fail to see the connection when it comes to every other area — such as taxation and, the main issue here, health care.