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Invited Commentary
July 26, 2019

Disparities, Inefficiency, and Competition in Health Care: The Case of Lifesaving Treatment for Stroke

Author Affiliations
  • 1Icahn School of Medicine at Mount Sinai, New York, New York
JAMA Netw Open. 2019;2(7):e197840. doi:10.1001/jamanetworkopen.2019.7840

Our ability to treat strokes has improved dramatically in recent decades, fueling initiatives to create centers of excellence in stroke care. Multiple organizations now exist to certify hospitals as stroke centers. Unlike other countries, the United States lacks a coordinated effort to distribute these centers according to need; instead, individual hospitals decide to pursue certification and carry the costs of doing so.

Shen et al1 present evidence that the spread of credentialing for stroke centers follows market forces, occurring first in wealthier areas and at more profitable hospitals. Stroke center certification remains much less common in lower-income areas, including the 8 states of the stroke belt, where stroke-associated mortality is unusually high. In other words, profit rather than need is driving the availability of lifesaving stroke care, creating disparities.

Shen et al1 cite other studies that have geographically modeled and mapped stroke center placement. Those studies’ findings regarding what portion of the population are in timely proximity to stroke centers vary. One major study2 encouragingly found that, despite a lack of national-level coordination, by 2011 almost everyone in the United States was within 120 minutes of a stroke center by helicopter if not by road. However, the same study2 found very low treatment rates (<5%), implying continued impaired access, consistent with much of the other literature.

The findings of Shen et al1 follow patterns of diffusion previously seen for a number of other innovations in health care. These patterns were initially described with respect to diffusion of capabilities for cardiac care.3 Shen et al1 reveal that stroke center certification tracks cardiac care diffusion remarkably closely: 80% of stroke centers, but only 20% of noncertified hospitals, have advanced cardiac capabilities.

Particular logistical hurdles exist in the provision of time-sensitive care in rural areas, where travel times to hospitals can be long. Shen et al1 find evidence of this: stroke centers are created more in urban areas, and only in rural areas is proliferation not related to income. Otherwise, though, their work provides us with yet another important example of how market competition alone cannot be relied on to achieve the trifecta in health care: quality, cost control, and access.

That this is true logically follows from the basic economic model of perfect competition. In perfect competition, production is maximally efficient and prices are set where the supply of a product is equal to demand for that product. In other words, consumers purchase all of the product made by producers at the market price, and producers create enough product that everyone who wants the product and can afford it at that price can buy it.

Please note that in casual conversation, people often use the term “free market” to refer to perfect competition. However, “free market” just means unregulated market. Free markets are neither necessarily expected to, nor in reality ever do, lead to perfect competition and its benefits. For example, monopolies form in unregulated markets, eliminating competition.

A perfectly competitive market theoretically comes with great advantages in the production of kitchen appliances and luxury automobiles, but it in no way guarantees that the price of a product will be universally affordable (eg, that everyone can purchase a luxury car). If access to luxury cars, health care, or anything else is a priority, we need to look beyond market competition to provide it.

Do we, as a nation, value universal access to lifesaving treatments the way we value universal access to elementary education? History implies that we are conflicted: governments fund hospitals and clinics, and we attempt to ensure access for vulnerable groups through Medicaid and Medicare. The 1986 Emergency Medical Treatment and Labor Act4 mandates that emergency departments stabilize everyone regardless of ability to pay. On the other hand, we have never established a national health care system, and elected representatives have recently attempted to dismantle access protections of the 2010 Affordable Care Act, including the mandate that health insurance cover emergency care.5

Generally, increased access (equality) comes at the expense of either increased cost or decreased quality (decreased efficiency).6 For example, instituting price controls so that a product is affordable to everyone, as some countries have done with health care, is predicted to decrease hospitals’ investments in more expensive care, and thus to lose the benefits of those technologies. In fact, cardiac catheterization is used much more frequently in the United States than in countries where health care systems are more designed to prioritize equality.6 Rather than imposing price controls, a government can subsidize care for those who otherwise cannot afford it, creating access while preserving quality. Then, however, cost control goes out of the window.

Indeed, concerns about losing quality or efficiency in our health care system are often raised in response to proposals to improve equality and access, but how well do competitive market models even apply to health care? In a seminal 1963 study, Nobel prize–winning economist Kenneth Arrow7 famously explained why the fit is poor. Arrow focused largely on the failure of health care to meet certain basic assumptions required for perfect competition, such as the availability of perfect information, where consumers are fully able to evaluate the quality of what they purchase. Failure to meet the model’s assumptions predicts market failures.

Many of Arrow’s7 predictions have come to pass in the decades since.6,8 We can see some of the effects of imperfect information when new, profitable technologies are adopted enthusiastically, driving up prices, before there is much evidence of their benefit; some of the greater use of cardiac catheterization in the United States has been shown to increase costs without benefit, potentially creating harm.8 The Dartmouth Atlas9 demonstrated much more broadly that increased use of services increases costs but does not always improve outcomes. Thus, competition in health care does not always optimize quality at a given price.

Arrow’s7 work predates our understanding that when a physician or hospital performs a certain procedure more often, the outcomes improve. Now that we know this to be true, we can see that 2 more conditions required for perfect competition are violated: that the behavior of one physician or hospital does not affect the market and that there are no economies of scale. Because there is a limited supply of strokes (equivalent to a limited supply of an input required to make a product), the presence of more stroke centers affects the number of strokes each center treats. As Shen et al1 and others note, market-driven establishment of more stroke centers in certain (wealthy) areas may be duplicative and, paradoxically, may decrease quality in those areas by decreasing the number of procedures performed in each center.1 The predicted benefits of optimized quality through competition will not occur.

As a society, we need to choose how much we care about accessibility of lifesaving medical care. If access remains a goal, competitive market forces alone cannot be relied on to create it. Evidence suggests that a competitive market will not provide the best care for even the wealthiest among us. More structured health care systems have limitations of their own, but avoiding a national dialogue on the trade-offs between access, quality, and cost by insisting that market competition will always create the best possible health care is misguided. Deferral to the free market will certainly not ensure that everyone receives lifesaving care for strokes or other emergencies.

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Article Information

Published: July 26, 2019. doi:10.1001/jamanetworkopen.2019.7840

Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2019 Rabin E. JAMA Network Open.

Corresponding Author: Elaine Rabin, MD, Emergency Medicine, Icahn School of Medicine at Mount Sinai, One Gustave L. Levy Pl, PO Box 1620, New York, NY 10029 (elaine.rabin@mssm.edu).

Conflict of Interest Disclosures: None reported.

Shen  Y-C, Chen  G, Hsia  RY.  Community and hospital factors associated with stroke center certification in the United States, 2009 to 2017.  JAMA Netw Open. 2019;2(7):e197855. doi:10.1001/jamanetworkopen.2019.7855Google Scholar
Adeoye  O, Albright  KC, Carr  BG,  et al.  Geographic access to acute stroke care in the United States.  Stroke. 2014;45(10):3019-3024. doi:10.1161/STROKEAHA.114.006293PubMedGoogle ScholarCrossref
Cutler  DM, McClellan  M. The determinants of technological change in heart attack treatment. National Bureau of Economic Research working paper series. https://www.nber.org/papers/w5751.pdf. Published September 1996. Accessed June 17, 2019.
Social Security Act of 1986 Section 1867: examination and treatment for emergency medical conditions and women in labor. 42 USC §1395dd (1986).
Palanker  D, Volk  J, Giovannelli  J. Eliminating essential health benefits will shift financial risk back to consumers. The Commonwealth Fund. https://www.commonwealthfund.org/blog/2017/eliminating-essential-health-benefits-will-shift-financial-risk-back-consumers. Published March 24, 2017. Accessed June 19, 2019.
Cutler  DM.  Equality, efficiency, and market fundamentals: the dynamics of international medical-care reform.  J Econ Lit. 2002;40(3):881-906. doi:10.1257/002205102760273814Google ScholarCrossref
Arrow  KJ.  Uncertainty and the welfare economics of medical care: 1963.  J Health Polit Policy Law. 2001;26(5):851-883. doi:10.1215/03616878-26-5-851PubMedGoogle ScholarCrossref
Skinner  JS, Staiger  DO, Fisher  ES.  Is technological change in medicine always worth it? the case of acute myocardial infarction.  Health Aff (Millwood). 2006;25(2):w34-w47. doi:10.1377/hlthaff.25.w34PubMedGoogle ScholarCrossref
Fisher  ES, Bynum  JP, Skinner  JS.  Slowing the growth of health care costs: lessons from regional variation.  N Engl J Med. 2009;360(9):849-852. doi:10.1056/NEJMp0809794PubMedGoogle ScholarCrossref
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