When patients pay for care with their own money, doctors and hospitals tend to vigorously compete on the basis of cost, quality and access to care. But when medical bills are paid by third-parties (insurance companies, employers and government), providers will tend to deliver care in the way that gets the most money out of the bureaucratic payment formulas.
You would think that this fact would be prima facie obvious. Yet every once in a while we get a new government report that expresses surprise that the provider community acts in its own financial self-interest.
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