Suspend the price mechanism, put the government in charge, and, sure enough, lo and behold, shortages and quality problems result.
The New York Times reports: "Congress enacted new rules to make the tests a rare oasis within the American health care system — the price had to be public; and co-payments, deductibles or other charges weren't allowed." I've got no objection to public pricing, but in the case of testing, the price to the consumer is, by act of Congress, always supposed to be zero. No wonder it's not working well: "the demand for testing has soared, surpassing capacity...a shortage of certain supplies, backlogs at laboratories that process the tests."
Pricing in American health care is complicated—there's the list price the provider asks for, then there is the negotiated rate that the third-party payer, usually a government or insurance company, actually pays, and then there is the patient's share or copayment. The problem with making the government the sole payer is that the government isn't always that shrewd a negotiator. Here is Bill Gates, who knows a thing or two about public health, in a recent interview with Wired talking about the problems with eliminating price signals from testing:
[interviewer:] But people aren't getting their tests back quickly enough.
[Gates:] Well, that's just stupidity. The majority of all US tests are completely garbage, wasted. If you don't care how late the date is and you reimburse at the same level, of course they're going to take every customer. Because they are making ridiculous money, and it's mostly rich people that are getting access to that. You have to have the reimbursement system pay a little bit extra for 24 hours, pay the normal fee for 48 hours, and pay nothing [if it isn't done by then]. And they will fix it overnight.
Why don't we just do that?
Because the federal government sets that reimbursement system. When we tell them to change it they say, "As far as we can tell, we're just doing a great job, it's amazing!" Here we are, this is August. We are the only country in the world where we waste the most money on tests. Fix the reimbursement.
