Healthy competition

Author Regina Herzlinger says consumer choice would cure what ails the U.S. health-care system | Marvin Olasky

We decide which goods and services to purchase from an amazing array offered to us in many areas of our lives. But, for most Americans, two of the most critical areas are exceptions to our national emphasis on consumer choice. One is education, with its public-school system maintained by union power. The other is health care, run by what Regina Herzlinger calls an "iron triangle" of third-party institutions—Congress, health insurers, and hospitals—that stand in the way of consumer-driven health care.

Herzlinger, a Harvard Business School professor and a senior fellow at the Manhattan Institute, succinctly lays out her analysis in Who Killed Health Care? (McGraw-Hill, 2007).

Q: Why do many hospitals and other health-care providers oppose letting the American people know the price of the medical services we use and the results doctors and hospitals achieve?

Sunshine is the best disinfectant. Providers fear that they will be the victims of transparency. After all, the only ones who will benefit are those who achieve higher quality at a better price. And what we do know about U.S. health care is not overwhelmingly positive; we spend 40 percent more as a percentage of GDP, as the next highest-spending country, and yet over 300,000 people are killed by hospital errors every few years.