It's always dangerous when I talk about health care

There's been a fascinating discussion going on at Megan McArdle's blog today about the connection between drug innovation and a free market health care system. To me, this is the absolute heart of this issue. When I look at health care, I think any system (public or private) should focus on the following:

1. Ensuring that everyone has access to a good standard of care, both emergency and preventative. As government resources are directly expended toward that end, they should go to the following: the poor and sick, the poor, the sick.
2. Ensuring a system where people are free to acquire a standard of care above the 'good' standard if they are able
3. Ensuring that medical advances are incentivized
4. Ensuring that important medical advances necessary for a good standard of care are available widely

There are 2 major problems (for me) with these priorities: what is a good standard of care? How do you balance medical innovations with affordability?

Personally, I don't care if we have a public system or not. It appears to me that a purely private system simply cannot meet conditions 1 and 4. It appears to me that a purely public system cannot meet conditions 2 and 3. Therefore it seems that either I need to pick among 2 pairs of optimal outcomes, or there needs to be an alternative system. So what is the alternative system? Is it possible to have a system like college? Bear with me a second, this just ocurred to me today, but if you were to ask me what is important about a high education system, I think I might say the following:

1. Ensure that everyone who wants it has access to some standard of higher education
2. Ensure that colleges and universities continue to make their faculty/school services better
3. Ensure that people should be able to get a higher level of higher education if they're able to do so

Admittedly, there is no corralary for my health care #4 point, but aside from that I think it tracks. The obvious difference is (I think) that risk/merit is much more easily signalled through fair methods in education and that there is an incentive for good colleges to take in students who cannot afford their tuition. There is no incentive for insurance companies to take in even really healthy people if they can't pay premiums. There are many other huge differences as well, but I do wonder if the higher education system in this country (which I believe is generally regarded as the finest in the world) might offer some suggestions as to how health care could be provided. Or is this the stupidest thought ever.