The quality of health care is a crucial factor in the well-being of an individual and a society. It is a major service industry, consuming anywhere from 3 to 18 percent of any country’s GNP (Gross National Product). It provides employment for large numbers of highly skilled professionals and unskilled laborers. It is an important component of the economy, and it often defines local social life and community identity. The government regulates it to prevent market forces from imposing unintended consequences and to promote consumer choice. It also provides financial protection against medical expenses. It provides benefits for populations that the private market may not effectively serve, such as disabled and elderly persons and those whose access to health services is socially valued, such as children and pregnant women.
A health care system consists of physician practices, hospitals and other facilities, such as nursing homes, that work together to provide care. Increasingly, the health care sector is moving toward models that combine and coordinate these services rather than treating patients in siloes. In these models, doctors and other providers share information to ensure that patients receive the right care in a timely fashion.
Most people are concerned about the quality of their own health care, and they want to make sure they have a good relationship with their physicians. They also want to be able to choose their own doctors. The quality of health care can be measured in terms of medical outcomes and patient satisfaction, as well as by the cost of providing it.
The United States ranks below most other countries in the Organization for Economic Co-operation and Development on both measures, despite spending significantly more than other high-income nations. In fact, per capita expenditures on health care rose 102 percent from 1993 to 2002. Hospital services accounted for 31 percent of this spending, while professional services and drugs and equipment each accounted for 22 percent.
In addition, Americans visit their physicians less frequently than residents of other OECD nations. They are also more likely to die younger from diseases that are treatable and preventable, which is a reflection of the overall low level of health care performance.
Proponents of market economies in health care argue that competition, with its corresponding principles of price transparency and free entry by new players, will lead to higher levels of quality and efficiency. However, market economies are based on the assumption of perfect information and homogeneous products (in this case, health care). In reality, health information is often imprecise, and medical products—the processes and outcomes of treatment—cannot be homogenous because they apply to unique individuals. These realities challenge the validity of market-economics approaches to health care.