Clear Thinking on Healthcare

When someone is arguing that the health system needs an overhaul, one of the most common reasons they cite is that “our health system is built on a flawed foundation of fee for service.” Arguments like this always sound so bulletproof when they rely on vague yet widely accepted assumptions, but let’s think clearly about this, just for a moment.

First, let’s go back to Econ 101 to recall that association does not imply causation. So, when you see a health system based on fee for service that is delivering surprisingly low value, you are seeing an association. It starts to look a lot more like causation when you compare this health system to other health systems in the world that are not built on fee for service but are all delivering much higher value. But it starts to look a lot less like causation when you compare this health…

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