tag:blogger.com,1999:blog-3227160671897218195.post4330773373934491700..comments2011-03-05T09:40:56.051+01:00Luis Pareras M.D., Ph.D.http://www.blogger.com/profile/16575222342526855913noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-3227160671897218195.post-5770475241112706072008-01-16T22:41:00.000+01:002008-01-16T22:41:00.000+01:00Heavily regulated industries (such as energy, utilities and, yes, healthcare) usually employ cost-plus methods to fix prices or reimbursement. Hence, the incentives for cost reduction are low.<BR/><BR/>I agree that Porter´s proposal to shift competition from individual services to whole value chains is attractive. I disagree, however, with the view that all technological advance is intrinsically cost-increasing. Weisbrod´s "Health Care Quadrilemma" (a great reading if nothing else) clarifies this point. What he calls "high technology" (vaccines are a good example) are indeed cost reducing. The problem lies, again, in the lack of incentives to develop such value-increasing technologies under the current system.JAMnoreply@blogger.com