I’ve been reading a lot of blogs written by economists recently, and their manner of looking at the world is starting to influence mine.

In Econ 101, we learn that the best way to steer individual and collective behavior in a capitalist system is to offer incentives (carrots) and/or disincentives (sticks).

Here is the current incentive structure as it pertains to health care. As you can see, it’s a mess:

People: Incentives to be overweight and unhealthy
The Uninsured: Incentives to stay uninsured
The Insured: Incentives to get every treatment in the book
Doctors: Incentives to provide more health care rather than keep people healthy
Insurers: Incentives to insure only healthy people, drop unhealthy ones
Pharmaceutical companies: Incentives to sell, um, pharmaceuticals, regardless of their usefulness, cost, efficacy
Lawyers: Incentives to file, um, lawsuits
Politicians: Incentives to fund campaigns with money from special interests (insurers, trial lawyers, etc.)

It seems, then, that to heal our broken health care system, we need to create the right incentives for each of the above stakeholders.

There. Problem solved. :)