Healthcare and Cost

Thanks to Vondy, I just read a good New Yorker article about why healthcare costs are skyrocketing in some places and work fine in others.

It's a good article because it gets away from the dramatic - why can't we be like Canada or Japan/everyone deserves healthcare vs. death panels/public insurance is going to ruin America kind of discussion. It focuses on what works and what doesn't in the American system and why some regions have expensive healthcare and others don't. It makes a lot of common sense.

The most fascinating part, to me, of the article deals with the concept of the anchor tenant, because the implications are much larger than the healthcare question.

Woody Powell is a Stanford sociologist who studies the economic culture of cities. Recently, he and his research team studied why certain regions—Boston, San Francisco, San Diego—became leaders in biotechnology while others with a similar concentration of scientific and corporate talent—Los Angeles, Philadelphia, New York—did not. The answer they found was what Powell describes as the anchor-tenant theory of economic development. Just as an anchor store will define the character of a mall, anchor tenants in biotechnology, whether it’s a company like Genentech, in South San Francisco, or a university like M.I.T., in Cambridge, define the character of an economic community. They set the norms. The anchor tenants that set norms encouraging the free flow of ideas and collaboration, even with competitors, produced enduringly successful communities, while those that mainly sought to dominate did not.

The article goes on to talk about the Mayo Clinic and other successful regional healthcare systems vs. unsuccessful regional healthcare systems like McAllen, Tx.

Understanding healthcare on this level gives me little reason to believe a huge Washington bill is going to influence the system one way or the other. Rather, it seems like a set of localized strategies to combat ridiculous systemic practices such as bribery and incentives for doctors to give too much care is a much smarter solution. This is not dissimilar to what happened in Iraq in 2008...while all the politicians in Washington fretted about a grand national bargain between Sunni and Shiaa political groups to end the near Civil War, what actually ended up working were a series of small local deals that grew in number where Sunni groups simply decided to take on Al Queda on their own and solicited American support. It wasn't a top-down solution at all, but rather a bottom-up solution.

The person that figures out to work this in healthcare is going to be an unsung hero. Like the dude Bill Simmons lionizes for creating the shot clock in basketball, the man who created the sandwich, and whoever first allowed us to turn right on a red light...these guys aren't rich or famous, but they made the world a whole hell of a lot better. We need guys like that in every community to fix small rules with huge implications. Like the dude who invented Settlers of Catan. I say just bring him in to McAllen, Tx and all the lame places, pay him a million bucks and go with whatever he recommends. I swear it'd probably work.