Opinion

Edward Hadas

Market failure can be sign of fatigue

Edward Hadas
Jun 11, 2014 14:17 UTC

By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Modern economies work to meet consumers’ needs. So if needs are not met, that must be an economic failure, right? Healthcare suggests otherwise. Sometimes, unhelpful ideologies get in the way of economics delivering the goods.

Chronic fatigue syndrome (CFS) – also known as myalgic encephalopathy (ME) – is a case in point. The economic benefit of treating this difficult condition should be material for patients, drugmakers and society. Yet the treatment is poor.

CFS is still a mystery. It is identified mostly by its long list of symptoms, starting with persistent exhaustion. What seems to be happening is an interconnected network of malfunctions in the nervous, circulatory and digestive systems. Estimates of the number of sufferers vary greatly. Something like 0.1 percent of the population is plausible.

Medical ignorance reflects a lack of research, and the lack of research reflects a lack of professional respect. Despite the devastating effects on those who have it – many sufferers spend years bedridden – most doctors and funding agencies did not take the disease seriously until recently.

AOL, solidarity and health insurance

Edward Hadas
Feb 19, 2014 15:59 UTC

The head of the American internet company AOL managed to say something really stupid a few weeks ago, and to sound callous at the same time. It’s a shame Tim Armstrong came off so badly, because he was trying to deal with a serious topic.

Armstrong was trying to justify the company’s decision, since reversed, to trim its employees’ retirement benefits. He started out at a disadvantage, because the chosen cutback was sneaky. A change that sounds innocuous, moving from monthly to annual employer payments into employee pension savings accounts, is actually a way to eliminate payments to employees who leave before the end of the year. It’s hard to look honest and upfront when explaining that.

But the former Google bigwig turned a disadvantage into a public relations disaster by bringing up the high costs of caring for two employees’ premature babies. The implied complaint about these million-dollar infants sounded heartless and invasive. In more humane hands, though, the Armstrong discussion could have been a fruitful one. The challenges that AOL faces are built into the way Americans arrange their employee welfare programs.

How not to do healthcare

Edward Hadas
Dec 11, 2013 16:26 UTC

Almost every healthcare system in the world is a lesson in how not to do it. The pricing-based model fails miserably in the United States. The rationing model works almost as badly in the UK. Both fail in the core task of ensuring that the right healthcare goes to the right people.

Price systems should provide clear information to consumers and producers, helping both make sounder decisions. They can help make hard decision about what care is worth giving, but only if the prices accurately reflect the costs. But that doesn’t happen in American healthcare.

Every service and each drug has many prices, depending on who is providing and who is paying. Almost none of the prices bear any clear relation to costs. The New York Times reported earlier this month that the price of a dose of codeine ranges from $1 to $20 in San Francisco. Hospitals routinely send much higher bills to uninsured patients than to people with insurance. The uninsured have less ability to pay, but they have no clout pre-treatment and less clout than insurance companies in the inevitable post-bill negotiations.

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