Lasik Surgery for the Medical Debate

A new video from Reason.tv titled "How To Fix Health Care: Lasik Surgery for the Medical Debate" is getting a lot of attention on the Internet, including links at Instapundit and Carpe Diem. "Lasik as a model for health care reform" is the headline of the Carpe Diem post by economics professor Mark Perry, who notes that because consumers pay for laser eye surgery to correct their vision themselves rather than having it covered by insurance, prices for the procedure have dropped. As Mr. Perry puts it, "In one of the few truly market-based areas of health care that is actually consumer-driven (since it's not covered by insurance and patients make direct cash payments) - LASIK eye surgery - there have been market-driven improvements in quality and dramatic reductions in cost, which could be a model for health care reform for other procedures." Or as Dr. Robert Maloney, the laser eye surgeon featured in the Reason video, puts it, "I think Lasik can act as a model for health reform." While there's something to the argument about declining costs, the quality levels leave something to be desired, as the Web sites devoted to Lasik horror stories attest. Even Dr. Maloney, who comes off as a free market medical hero in the Reason video, has at least one seriously dissatisfied patient, as this Web site attests. Granted that some of the anti-Lasik sentiment is driven by trial lawyers who hope to profit by suing doctors, and granted that doctors who work at non-profit hospitals, or in government-run health care systems, and who perform procedures that are covered by health insurance, also sometimes have dissatisfied or even dead patients, or bad outcomes. Even conceding those points, though, it seems to me that the center-right or libertarian or free market forces are making a tactical error by portraying Lasik as a desirable model for the rest of the health care system to emulate. It may be a model for cost reduction, but not for quality improvement. In part that may be because, for all the disdain that ideologues of the left and right direct at health insurers (the left thinks the insurance executives make too much money and their shareholders too much profit, the right thinks that consumers should be paying most of their health care costs directly out of pocket rather than pre-paying it through insurers), the insurance companies actually can play a useful role in quality control. An insurance company paying for 1,000 eye surgeries a year can get a pretty decent idea of who the best surgeons are, while a consumer paying to have his own two eyes fixed doesn't have that kind of experience to go on. The consumer has a better incentive (they are his or her own eyes), but the insurance company has better information.