Summers delivers annual Children’s Hospital Blackfan lecture:

Harvard President Lawrence H. Summers gave this year’s 50th annual Blackfan lecture at Harvard-affiliated Children’s Hospital in Boston. The talk, delivered to a packed Enders Auditorium at the hospital, focused primarily on the economics of health care.

Health care, Summers said, is the most important force in the nation’s economy, when one considers not just its direct economic impact, but also the role it has played in increasing life expectancy and improving overall health. Though some have been critical of the increasing proportion of the economy devoted to health care, Summers said those health-care resources have paid dividends and improved lives in ways that are difficult to put a price on.

“You cannot use prices to value what the health-care system has accomplished,” Summers said.

Summers, who was introduced by Children’s Hospital Alumni Association President Robert Shamberger, joined a list of distinguished Blackfan Lecturers, including three Nobel laureates, distinguished pediatricians, and leaders in related areas. The lecture is named for Kenneth Blackfan, who served as Children’s Hospital’s physician-in-chief from 1923 to 1941.

In the speech, Summers said that because health care’s function is difficult to value, it is also difficult to regulate entirely by market forces. Market forces are beneficial when they encourage efficiency and responsiveness. But the health-care system also provides needed services that a market-driven system might squeeze out as unprofitable.

Summers drew an analogy with the deregulated telecommunications industry, which he says provides much better phone service than ever before, with more choices and lower prices. But Bell Labs, which for years conducted basic research that resulted in several important discoveries, has fallen from prominence, largely because basic science isn’t profitable.

In the health-care arena, doctors who are required to see a certain number of patients to work as efficiently as possible may not have time to tutor a medical student needing their counsel.

“In area after area, market forces are, on the one hand, spurs to efficiency, and, on the other, they sweep away needed social goods,” Summers said. “Charity care is an obvious casualty of greater efficiency and greater pressure to [respond to] market forces. The pressure on clinical instruction comes from market forces.”

Summers told the audience that he didn’t have a solution for the puzzle of how to create efficiency in the health-care system and still provide needed but unprofitable services. The answer, he said, probably lies in between the extremes of a totally regulated system and one completely open to market forces.

“Those who think we can treat health care like auto repair are missing the point,” Summers said. “Those who see only the costs fail to appreciate the very large stakes involved. It will be obligatory to put pressure on the system to achieve economies where possible. It is almost inevitable that the answer will lie in maintaining pressures for efficiency and creating counterpressures – and countersources of funding – for those [other] things that are important.”