Economics - General

Conversations with Tyler: David Cutler

Tyler Cowen has an interesting interview with Harvard health economist David Cutler speaking about (what else?) health economics. Below is an excerpt:

CUTLER: Everything that we know in healthcare is that people have difficulty choosing on the basis of price and quality. It goes back a little bit to some of the behavioral issues that we were talking about, but I think it’s slightly different. If you go to the doctor, and the doctor says you should take medication X, and you go to the pharmacy, and the pharmacy says that’ll be $30, a fair number of people will walk away and say, “I don’t have $30.”
What we would hope they would do is go to their doctor and say, “Doctor, is there any way that there could be a cheaper medicine that might work because $30 is hard for me this month?” In practice, people are extremely uncomfortable doing that. They really don’t like to go to their doctor and say, “Doctor, how do I trade off the money here versus the medicine?”
As a result, they wind up not taking the medicine, and then they avoid the doctor because they’re ashamed to admit to the doctor. People really don’t like the money being involved in the medical care part.
They’re also very afraid of the quality part, of having that quality discussion. For example, before you’d buy a TV, you’d look up and see what are the different characteristics and so on. Yet, before you do surgery, people rarely look up, how good is that surgeon? What’s that surgeon’s record? What questions should I ask of that surgeon?
They’ll ask it of the TV. They’ll ask it of the refrigerator, but they will not ask it of the surgeon, nor will they ask it of the referring doctor.

The interview is interesting throughout. Here is the transcript and audio.

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