From a value perspective, cost-plus is nonsense. A simple antibiotic treatment for a lung infection saves your life. It costs - at worst - € 100 and a couple of doctor's visits.

I don't know the price tag for a major cosmetic operation, but I would be very surprised if it is less than two orders of magnitude greater.

Without going too far into the value of purely cosmetic operations, I hope that we can at least agree that curing a patient of TB is more valuable than a facelift?

Further, the comparison of costs across suppliers assume a roughly comparable product and that customers are able to shop between suppliers. In many cases this is simply an invalid frame of reference. Not only is major surgery (nevermind emergency care!) a sufficiently rare event for most people that the marketplace won't work [1], there is also the issue that many aspects of pre- and post-treatment care are not (easily) comparable across facilities.

Applying the kind of metrics that you suggest to medical care is like trying to figure out the mass of the Earth by counting the number of pebbles on a beach. It's not the right way to do it. In fact, it's not even a wrong way to do it.

And don't get me started on the moral hazard of reducing citizens to "consumers" and medical professionals to "suppliers."

Don't get me wrong; I'm all for transparency and accountability. But making up insane measurements just to measure something isn't accountability. It's accountabilityness, to Colbertize a bit.

- Jake

[1] Recall that the marketplace is only self-correcting if the burnt hand can teach - if each person breaks his leg at most once or twice during a lifetime, there is no way he can amass the level of experience with the different providers of health care to make an informed choice on his own.

If you only spend 20 minutes of the rest of your life on economics, go spend them here.