There isn’t a magic solution, but I do think that markets would help in bringing down medical costs. If I have insurance and can go to a doctor for free (no co-pay insurance from my company) or stop by the Minute Clinic and see someone who can give me the same care (or send me to the doctor if they are not sure) but I have to pay $20, I know I’ll choose the doctor. Even though I know the social costs are much, much higher, and that by going to the doctor, I’m making it harder for the Minute Clinic to stay in business and reduce health care costs.

But the idea that someone can decide all this stuff for me, so I don’t have to think about it, or worry that I made a mistake and chose the wrong thing, is pretty appealing to many (me?). So I understand the appeal of centralizing the process, either with an insurance company bureaucracy or the intervention of some government. But I also know that centralization can never work very well (information economics) and will stifle innovation (a hard to determine but real cost).

Here’s a reasonable article arguing for the market solution. But I think there is a way to explain this even more simply and convincingly. I hope someone tries.