January 29, 2009 8:01AM

Atul Gawande Is Right

Path dependence plays a huge role in shaping nations’ health care sectors. Path dependence is also why we want health care reform to nudge America toward freer markets.

Government exacerbates path dependence. Government gives the old order the power to block the new. The larger the role government plays in health care (or anything else), the harder it is to make incremental changes that would yield greater benefits than existing arrangements. 

That’s why, as Gawande observes, Medicare does a lousy job of improving quality. (Or containing costs, for that matter.) Medicare and other government interventions are also why we don’t see enough innovation in the private sector, either.

So if you want tomorrow’s health care sector to have the same problems with cost, quality, and access as today’s, then by all means expand Medicare. Or create a government‐​run “exchange” like the Federal Employees Health Benefits Program. Or expand the Veterans’ Health Administration. Or expand Medicaid and SCHIP

But if you’d rather a health care sector that constantly makes improvements in cost and quality, you need to let seniors and non‐​seniors alike control their health care dollars and choose their own health plan.