While there is much to praise in the IOM report, it's based on assumptions that merit careful scrutiny. One is the unquestioned notion that health care is an industry. We have an energy industry, an automotive industry, and a telecommunications industry. Just as we transplant organs from well patients into sick ones, the authors seem to suppose, we should be able to transplant effective practices from healthy industries into our ailing health care system.

One problem with a patchwork approach to reforming healthcare is the danger that we may produce a sort of Frankenstein, a monstrosity made up of parts that look strong when viewed in isolation but turn out not to fit well together. We cannot merely mix up two-thirds of a cup of banking, a quarter cup of manufacturing, and two tablespoons of airline policies and procedures and expect to produce well-integrated patient care.

No matter how good each of the individual ingredients that go into preparing a meal are, if the components are not mixed in the appropriate combinations and proportions, the result is more likely to prove stomach churning than appetizing. The fact that the IOM report cites multiple different industries suggests that no single one has gotten everything right, and this in turn suggests that each industry may face its own distinctive challenges and opportunities. This is certainly true for health care.

Even more problematic is the assumption that health care can and should be treated as an industry. An industry is defined as a sector of economic activity. If a product or type of work can be bought or sold in the marketplace, or if its inputs and outputs can be measured in dollars, we can consider it part of an industry. On this basis, we are often told that the health care industry represents 18% of the U.S. economy, over $2.5 trillion.

Billionaire investor Warren Buffet recently referred to health care as a "tapeworm" in the digestive tract of the US economy. He was alluding to the fact rapidly rising health care costs are forcing US employers to spend so much money on health care for their employees that US industries are placed at an ever-growing disadvantage compared to competitors in other nations where health care costs are lower. From an economic point of view, doctors, nurses, and hospitals resemble parasites.

Yet the industrial metaphor has its own Achilles heels. For one thing, the practice of medicine is not primarily an economic activity, and measuring its inputs and outputs in terms of dollars and cents provides a narrow and superficial view of what really goes in doctors' offices and hospitals. Despite economists' best efforts to tally up in economic terms the costs and benefits of care, many of the most important things taking place between doctors and patients never get evaluated.