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"C O N S U M E R C H O I C E I S nonsense when it comes to health care ...," writes economist and New York Time s colu m n ist Pau l K r ug ma n, a proponent of the view that the medical industry is governed by a unique set of rules and patterns where the customer is concerned. "There are ... no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn't work." K r ug ma n is one of a nu mber of economists who support the concept of healthcare exceptionalism, a theory that the medical industry does not follow the typical supply-and-demand model. They argue that a business associated with lifesaving goals and urgent demands simply cannot be left to the market pro- cesses that guide industries producing and providing other goods and services. The Debate Their assessment is not universally shared, however. A g roup of resea rchers f rom t he Rober t Wood Joh nson Fou nd at ion (RWJF) and other institutions put the healthcare exceptionalism theory to the test in a recent study. The team e v a l u a t e d d a t a f r o m m o r e t h a n 3.5 million heart attack patients insured by Medicare between 1993 and 2007. They discovered that many of these patients chose to be treated at facilities with high marks in terms of effi ciency and outcomes. "Even in hea r t att ack s, which is a ver y emergent condition, there is a mechanism that rewards efficient performa nce," says Chad Sy verson, Professor of Economics at the University of Chicago and one of the authors of the study. "Health care, at least along the dimension we study, looks more like other markets than many folks think." The Study T he RW J F g roup me a s u re d t he productivity of different hospitals by the length of time patients survived following a heart attack, taking into account variables such as demographics, health history and treatment. They found that hospitals that generated the best outcomes using fewer resources saw higher traffi c from patients than did less effi cient facilities, following the tradi- tional path to success in other industries. Furthermore, the data indicated that patients treated at more effi cient facili- ties were expected to live, on average, 50 percent longer than those treated at less effi cient facilities. The Takeaway "I don't think we have enough infor- mation to speak to the particular nature or strength of competition or incen- tives," Syverson says. "We just know that something moves traffi c toward more effi cient hospitals. … Policy-wise, we should be looking for ways to enhance that mechanism's workings — making i n for m at ion e a si ly a cce s sible a nd understandable, for example." R e a d t h e c o m p l e t e R o b e r t Wo o d J o h n s o n F o u n d a t i o n s t u d y a t http://www.nber.org/papers/w19200. ■ Consumer Behavior in the Medical Marketplace PEPPERED WITH GOVERNMENT DIRECTIVES, OPAQUE PRICING AND UNPREDICTABLE CUSTOMER TRAFFIC, THE HEALTHCARE INDUSTRY HAS LITTLE IN COMMON WITH OTHER SECTORS OF THE ECONOMY — OR DOES IT? By Katy Mena-Berkley +++++++++++++++++++++++++++++ + +++ + +++ +++++++++++++++++++++++++++++ BUSINESS OF MEDICINE 4 | South Central Pennsylvania MD NEWS ■ M D N E W S . CO M