Very Well-Written and Researched Article on The Healthcare Crisis

In "The New Yorker", Atul Gawande has a very good article on the health-care crisis.  It is 8 pages, but well-worth reading. Basically, he looked at McAllen, Texas which is a border town that has the highest medical expenditure in the country.  Why are the prices high?  Texas has medical tort reform.  Because of poverty, there is a high amount of alcoholism and obesity, but about the same rates as El Paso, which spends a lot less. Ultimately, he concludes that it comes down to the doctors and their mentality.  In McAllen, the doctors are entrepreneurial, and look at patients as a source of revenue.  More than in other cities, the doctors own partnerships in for-profit hospitals and diagnostic centers and tend to schedule more diagnostic tests and follow-up visits. At the Mayo clinic, by contrast, they have some of the cheapest and best heathcare.  There, it is set up that doctors are on salary and profits are pooled and distributed.  They put patients first over maximizing revenue.  The critical thing is that doctors meet and brain storm together, as an alternative to ordering more tests. Gawande feels that all the current proposals (having private insurance companies vs. public options vs. single-payer vs. health savings accounts) are all missing the point.  The only way to reduce costs and improve health care is to provide incentives for physicians to privately form associations to work together. I think he is probably right that unnecessary tests are why healthcare is expensive and, since TX has tort reform, it's not that the doctors need to cover themselves, but because of profits. But, that doesn't mean entrepreneurship is the problem.  It's just that the doctors are clever enough to exploit the real issue - that the people who pay aren't the people who benefit.  If people were price conscious (paying out of their pocket, for example) it would be hard to sell extra, expensive tests. I saw one of Dylan Ratigan's articles where he also described this.  He said that no other form of insurance is tied to your employer.  He described health insurance like you and your collegues go out to lunch and know that the total bill will be split between all of you and your employer pays half and chooses the restaurant.  So you are limited to the choices there and will pick the most expensive option because you know that the cost will be split. Getting a plan independent of work is like dining alone.  You are responsible for the whole bill, so you might not take the most expensive package of benefits.