Jul 17, 2007

Pay for performance

Marginal Revolution covers a Johnson & Johnson proposal:

Johnson & Johnson has proposed that Britain’s national health service pay for the cancer drug Velcade, but only for people who benefit from the medicine, which can cost $48,000 a patient. The company would refund any money spent on patients whose tumors do not shrink sufficiently after a trial treatment.

This is very clever, and I think can be applied in such a way that some critics of the US health care system could be satisfied. If you are creative you can apply it to just about every aspect of the system.

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