health care and education

It'd interesting that health care and education are two (important) sectors where there is limited correlation between spending and outcomes.

As with any context with government involvement, there is often a divorce between resource and results-- whether the former Soviet Union or something largely run by the government (K-12 schools) or heavily influenced by the government (health care).

In education, home price "capitalization" works to clear the market-- in other words, the quality of the government schools is correlated with higher price homes. In the UK, we see something similar with "health districts"-- where people get only get health care from the government provider in their neighborhood. Will US health care eventually move that direction as well? Only the shadow knows...

John Goodman-- the godfather of HSA's-- expands on this at his (excellent) blog:

In many ways health care is like education. In both fields, we find a sea of mediocrity, punctuated by islands of excellence. Further, the islands of excellence appear to be randomly distributed. By and large, they are not correlated with anything. This is not only true in the United States. It is true all over the world.

The two sectors have two additional common features: (1) the individuals who receive the benefits of the services are separate from the entity that pays for them; and (2) we have completely suppressed the marketplace....

After the publication of A Nation at Risk about a quarter of a century ago, alarmed reformers decided to study the best schools to determine what they do that works and to use various carrots and sticks to try to get all other schools to do the same. This is what I call the “demand-side approach” to education reform. How well has this approach worked? Miserably...

The Obama Administration is committed to the very same approach in health care that has proved so unworkable in education!...

We cannot find a single institution providing high-quality, low-cost care that was created by any demand-side buyer of care....The Congressional Budget Office (CBO) has reviewed the evidence on all these reforms and concluded that the savings will be meager, if they materialize at all...Scholarly researchers have weighed in as well....