April 13th, 2013
06:51 PM ET

Zakaria: U.S. health care system has almost worst of all worlds

Watch the full interview on GPS this Sunday at 10 a.m. and 1 p.m. ET on CNN.

Fareed speaks with Steven Brill, founder of Court TV and The American Lawyer magazine, and David Goldhill, author of ‘Catastrophic Care: How American Health Care Killed My Father – and How We Can Fix It,’ about the problems with America’s health care system.

How would you change it?

Goldhill: Well, what I'm seeking is a balance, right? What we've done is all the way in this direction, in fact, further than almost any country on Earth, believe it or not, in reducing the amount of skin consumers have in the game.

But the problem isn't just money. The problem is the way the health care sectors compete now…we have a non-functioning price system in health care. Prices are not cost. They never have been. Their prices may make no sense by any normal economic means. It is to remove the consumer from the equation.

Consumers don't exercise power through leverage. They don't have leverage in any market. You don't have leverage in the cell phone market. Or the personal computer market or the home building market. We never have leverage. That's things that people say in health care they don't say in anything else. It's the competition for consumers that drives good behavior. And in health care, everything we've done has been to reduce competition.

So how could, I mean this seems like a point of agreement, where you talk...

Brill: Sure.

…so much about local monopolies, about the lack of competition, that the reason you can have this kind of price-gouging which you described is because you have all these local monopolies.

Brill: That's right. And the first part of the solution is complete transparency as to pricing so that…you have an instance where consumers have a choice, they have some kind of an informed choice. But if I'm right, and you need insurance – and they don't need to have 100 percent of the skin in the game – you need to balance the market out so that the insurers or whoever else is buying on behalf of the patient has some degree of leverage.

More from GPS: Why we need to fix health care

And I do think it is leverage. I think if I walk out of this building today and decide I'm going to buy a new cell phone, the leverage I have is at least knowing, a) that if it's way too expensive for all cell phones, I don't have to buy one, I will live another day…And b) there are lots of people who will sell me different kinds of cell phones at a different price.

I think that that is power and that is leverage. And that is completely missing from the health care economy today.

I think the one point of agreement is we, in the United States, have a kind of almost the worst of all worlds.

Brill: We've tried this really ridiculous experiment where we've left it, you know, completely to market forces, except that what's usual in a market is that there are two sides of the equation, the buyer and the seller. Here, the market forces only work for the seller.  And the result is, we've lived in sort of an alternate universe over the last 10 years, where, you know, the rest of the country, the economy hasn't been so good, in case you haven't noticed, for the last half decade.

But the health care economy is just a totally different planet. Everybody is making more and more money. You know, the salaries are ridiculously high. The profit margins keep going up. The salaries of the people who run the drug companies and the hospitals keep going up. And it's all at the expense of the rest of us.

A final word…

Goldhill: Our heart may be in the right place, but we're not just hurting ourselves and our pocketbook.  We're genuinely hurting our health.  We've unleashed a flood of excess care that is dangerous and unsafe. All health care is not alike, but we treat it all like it's alike.

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