I'm most interested in this bit:
A good place to get started there is Epistemology and the Psychology of Human Judgment, summarized on LW by badger.
Particularly since your initial claim that had me raising eyebrows was that MetaMed failed because they have great diagnostics, but medicine doesn't want good diagnostics.
Ah, that's a slightly broader claim than the one I wanted to make. MetaMed, especially early on, optimized for diagnostics and very little else, and so ran into problems like "why is the report I paid $5,000 for so poorly typeset?". So it's not that medicine / patients wants bad diagnostics ceteris paribus, but that the tradeoffs they make between the various features of medical care make it clear that healing isn't the primary goal.
The RAND experiment is not equipped to evaluate the overall healthcare effects of medicine, and that was not its main purpose - it was for examining healthcare utilization.
As I understand it, the study measured health outcomes at the beginning and end of the study, as well as utilization during the study. The group with lower copays consumed much more medicine than the group with higher copays, but was no healthier. This suggests that the marginal bit of medicine--i.e. the piece that people don't consume, but would if it were cheaper or do consume but wouldn't if it were more expensive--doesn't have a net impact. (Anything that it would do to help is countered by the risks of interacting with the medical system, say.)
I think I should also make it clear that there's a difference between medicine, the attempt to heal people, and Medicine, the part of our economy devoted to such, just like there's a distinction between science and Science. One could make a similar claim that Science Isn't About Discovery, for example, which would seem strange if one is only thinking about "the attempt to gain knowledge" instead of the actual academia-government-industry-journal-conference system. Most of Robin's work is on medical spending specifically, i.e. medicine as actually practiced instead of how it could be practiced.
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Not sure if there is a thread for this, does anyone have access to this article?
“Comparative Efficiency of Informal (Subjective, Impressionistic) and Formal (Mechanical, Algorithmic) Prediction Procedures: The Clinical Statistical Controvery”, Psychology, Public Policy, and Law 2: 293—323