There is a lot of talk about health care in terms of giving consumers of medical services choice in a marketplace. The basic cost-control measure that the Ryan Plan hopes for is that a market in health insurance will lower prices. Well, it likely won’t. The mechanism that will control prices is the willingness of people to make up the difference between Medicare vouchers and the actual costs. But brushing that aside, Paul Krugman takes ultimate offense to the characterization of “patients as consumers“:

Medical care is an area in which crucial decisions — life and death decisions — must be made; yet making those decisions intelligently requires a vast amount of specialized knowledge; and often those decisions must also be made under conditions in which the patient is incapacitated, under severe stress, or needs action immediately, with no time for discussion, let alone comparison shopping.

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The idea that all this can be reduced to money — that doctors are just people selling services to consumers of health care — is, well, sickening. And the prevalence of this kind of language is a sign that something has gone very wrong not just with this discussion, but with our society’s values.

Of course it is very true that life and death situations are made in the field of medicine…probably every day if not at a single hospital, at hospitals as a whole. But the actual truth of the matter is that the bulk of medical spending of the average person does not involve death at all…just nagging, often temporary, quality of life issues. In fact, outpatient care (which includes routine and sick visits to the doctor and same-day hospital visits), drugs and non-durables (which includes things like wheelchairs and other medical supplies), and administration account for ~2/3rds of all medical spending in the US.*

In this aspect of medical care, patients are consumers, and would benefit from price competition in a less-regulated market. Having strep throat doesn’t so much require “specialized knowledge”, as it requires a signed piece of paper so that you can get specialized drugs. Most moderately bad cuts are treated with the highly technical, and extremely specialized skill…applying super-glue.** Same thing with pain management, which in the name of the “War on Drugs”, we severely limit and police. This is why I think that leftist-liberals get it exactly backward when they want to push people into insurance markets, and then use a lot of administrative tricks in order to control costs. What you want to do is push people into a market for these services, perhaps by subsidizing price competition.

Then we can discuss the extent to which the government should intervene as a single payer for the remaining 1/3 of medical spending; which includes inpatient care (plus some emergency outpatient procedures from the previous category), long-term care, and end-of-life services, among a few other things. The point is you can’t just wrap the blanket of “life and death” and “specialized information” around every single medical service, and then claim that markets don’t work.

As an aside, is it really wise to base regulation on perceptions of different groups of people? Seriously?


*The information is a little dated, but it hasn’t changed much if at all: http://nihcm.org/pdf/EV_JensenMendonca_FINAL.pdf.
**I pride myself on the fact that I’ve super-glued many a cut of my own! Also, I have some odd illness that is STILL untreated, and it is naggingly annoying…however it’s hasn’t proven “life or death”. I would have much preferred shopping on price for services (like my CT scan for instance, which was $1,500) to having my insurance company pay tens of thousands of dollars in tests and visits — all which have yielded no results.

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