There’s More To Health Care Than Health

The Institute of Medicine put out a giant report yesterday on how it is that $750 billion a year gets spent on health care services that don’t make people healthier. I will confess that I didn’t read the whole thing, but Sarah Kliff likes this chart and so do I.

Something to keep in mind when considering these issues is Robin Hanson’s dictum that health care isn’t about health. There was no such job as “computer programmer” until the relevant technology existed and could be applied in economically useful ways. The profession of doctor or healer, by contrast, long predates the technology of scientific medicine. I think history shows us that all things considered people prefer useful, effective treatments to useless ones. But they have a limited ability to tell which treatments are useful. And historically speaking, it’s clear that in the absence of effective treatments people prefer ineffective ones. What’s more, the abundantly documented placebo effect tells us that even ineffective treatments can be effective! That in turn becomes a pretty good reason for patients/customers to neither know nor care very much about which health care services are and aren’t effective.

Under the circumstances, it would be really amazing for the industry not to be full of waste.