I review the book by Jonathan Bush and Stephen Baker. An excerpt:
Bush argues that for most medical services, flagship research hospitals are high-cost providers. He believes that in a rational marketplace, the leading hospitals would have to specialize in particular areas of expertise. A hospital with unique skills at treating a certain type of cancer might attract patients from all over the United States with that cancer. However, it would not treat local patients for ailments that are more common and more easily treated. Instead, those cases would be handled by smaller community hospitals or clinics.
Like many theoretically appropriate economic solutions, many “efficient” models suffer in reality. The progression of many health care cases is not predictable at the beginning. A “cancer” case may start as a suspected infection or other malady reasonably treated at a nonspecialized center…. but discovery, and then certainly treatment, is best completed elsewhere. The initial mistreatment and eventual transition efforts result in substantial inefficiency. While the concept of specialized centers is a good one, it is probably not a solution to the economic problems of health care.