Comparing Effectiveness of Health Care Procedures
By Arnold Kling
Gail R. Wilensky proposes creating a research center devoted to comparing the effectiveness of medical procedures.
The most obvious and direct way to finance at least the public portion of a comparative effectiveness center is through a direct appropriation by Congress. The rationale for public funding is that information is a public good, in the most classic sense: that is, it is not excludable and nonrival in its consumption. Economic theory argues that goods or services that meet this definition will be underproduced by the private sector and should therefore be financed by government.
…it might be possible to rely on the Medicare Trust Funds to finance a portion of the costs, since Medicare would obviously be an important beneficiary and could allow decision making about reimbursement that could result in future Medicare savings.
This is similar to one of the ideas in Crisis of Abundance. Thanks to Michael Cannon at Cato for emailing me the pointer.