The ideal system you describe is the Canadian model. Overall capacity
there is fixed by budget and health planning, and physicians do the best
within that system of constraints. Another way of putting this is that
patients have free choice of doctors and hospitals and the latter have
free choice of therapy within the physical resource constraint imposed
on both patient and doctor by the government. There is rationing, but
with appeal to fixed physical capacity, not with appeal to money budgets
in the face of excess capacity (the US model).
Why is the Canadian model off the table? Because America’s physicians,
as represented by the AMA, have shoved it off the table. Recall that
the AMA in the early 1990s had a $4 million war chest for the sole
purpose of bad-mouthing the Canadian health system. And the gullible
American public went along with it. All one needs to tell Americans is
that foreigners are un-American and the case is closed. We saw that in
the referendum on the single-payer system in California.
Thus, my friend, no sympathy for physicians from this economist, nor for
patients who find themselves pushed around by MBAs. I am firmly on the
side of the MBAs. American physicians have always sought a system
riddled with excess capacity and rationed with appeal to budgets, and
that is precisely what they got, “as the doctor ordered,” so to speak.
And, let us face it, MBAs are the ideal people to ration with appeal to
budgets. That is the great skill of business people.
Don’s comment: I certainly agree that we would need MBAs to help us
manage global budgets under a public service model, but we no longer
want them as emissaries of Wall Street.