Creating a Market for Healthcare: Information

The Boston Globe Reports:

State public health officials will decide this summer whether to publicize the patient death rates for individual physicians who perform two common heart procedures, giving Massachusetts patients unprecedented information about their doctors' performance.
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But many Massachusetts cardiac surgeons and cardiologists strongly oppose making the mortality data available to consumers, saying this approach could actually hurt care by discouraging doctors from taking high-risk patients who are more likely to die. They are pressing health officials to keep private one of the most detailed and carefully analyzed physician data sets in the country.
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Advocates of public reporting believe that it holds providers accountable for the billions of healthcare dollars spent annually and helps patients decide where to seek treatment, creating market pressure on providers to improve care. This is especially important for common procedures like cardiac surgery and angioplasty, which are often planned for months in advance, giving patients time to shop around.

Without a doubt, one of the reasons that healthcare does not work like a regular market is because of information asymmetries. Now, I'll fully admit that asymmetrical information is an essential feature of healthcare; if you knew as much about medicine as your doctor, you wouldn't need to visit him. Nonetheless, there is a dearth of information about the price and quality of healthcare. How can consumers express their preferences in a marketplace that lacks this information?

For example, a close friend of mine recently bought a Dodge Magnum. He knew about how much it would cost. Since the Magnum is a new model, he knew that he could not develop long term cost expectations. He was able to obtain this information quickly and without much effort.

Have you ever tried to find this information in healthcare? Simply put, it is near impossible to find the cash value of most procedures. With a bit of savvy (and a strong background in human biology), one may be able to research the outcomes of a certain procedure. However, it is quite rare that one can find data on the quality of a physician.

Professional medicine has consistently resisted the reporting of quality data. The nominal reason is that reporting will lead to selection biases within the data. Personally, I think that this is yet another protectionist policy.

So, I applaud Massachusetts for making this data available. Too bad this step forward merely mitigates two steps back.