The fate of medicine under Obamacare

Subject: The fate of medicine

Looks like government controlled medical care is on the way. The Democrats are taking advantage of their temporary total control of the federal government to start a new "entitlement" and take another step toward their vision of the benevolent world of socialism. One has to hand it to them. They are more persistant and determined than the Republicans when they were in the same position. Of course Bush had the little problem of 9/11 to contend with.

I view the struggle of medicine to progress in the face of government control in the last couple of decades as a metaphor of a man trying to make his way across a bog with his feet mired in mud that sucks back with each step forward. We watch in horror as we begin to see him finally tire and falter.

Fixing healthcare

Insurance is a mechanism for controlling risk for unlikely but high cost events. Using insurance as a payment mechanism for low cost everyday occurrances such as doctor visits is preposterous and the only reason we do it is that someone else is paying the premium.

Medical insurers are not the problem. They are simply offering a product for which there is a demand. For their work they make a reasonable profit which is in line with other service industries. Profit is not a problem. It is what rewards a business for a good product and efficiency. The reason that just about any government service you can name is impersonal and inefficient is the lack of profit motive. Giving over control of payment for medical care to the government on the theory that elimination of profit will produce lower cost is nonsense. Non-profit medical insurance companies are certainly no more efficient or less costly than for profit companies and they do not provide lower cost policies. If we want to make insurers even more efficient we must arrange for more competition.

Whichever way you slice the problem, medical care costs money. Medical personnel, prodedures and treatments must be paid for. The public will pay the bill either through taxes or as part of their work compensation. If we continue to insist on paying indirectly through government or through "insurance" arranged by employers, there will be higher cost, more wasteful, less appropriate and more inefficient results.

Medical care is certainly a right. What is not a right is demanding that someone else pay for it. In a wealthy and generous country it is proper that we help those who are unfortunate and deserving get proper medical care. That can be done through private charity and through government assistance. That problem does not call for government involvement to any other extent.

Medical Care Prices under government control.

Prices are the mechanism in the market for appropriate allocation of scarce goods with alternative uses such as medical services. If a central entity controls prices rather than letting price float freely this causes disruption in appropriate distribution and reduction in quality.

Prices (or fees or whatever you want to call them) for medical services in this country are largely set by Medicare. Look at any private insurance contract and you will see that it relates to Medicare prices. This phenomenon is producing misallocation of medical services and reduction in their quality in our country.

Democrats point out the obvious fact that those who are not in some way participating in this bizarre and stupid system have a problem when they require medical services. The answer is not to bring these people into the system but to let everyone else out of it.

Why medical care costs a lot

There are doctors who treat medicine primarily as a business. In our community I think they are a small minority. In other communities there may be a different culture. Of course in medicine, just as in any other service business, you must make a living by providing a service and the dividing line between what is absolutely necessary and what is simply hand-holding is somewhat blurred. The real problem here is that in medical care there is no counterbalancing force of the customer's interest in getting the best value for his money so that for the guy who wants to make money by doing a lot of remunerative tests it's like shooting sitting ducks.

What's the solution. First of all to consider this as the only or even the primary cause of high health care costs is foolish. Secondly, can the government set out regulations that determine what test in necessary and what isn't? Impossible. That is the route to medical insanity -- rationing on the basis of what costs the most or which group has the most political power.

Here's what I think is the clear answer. Patient power and competition. If the patients think that the Mayo Clinic concept is the best value then that is the mode that will dominate. The medical profession will be come along and be convinced by the power of the purse. Here is a response I sent to a doctor friend of mine who was, like Obama, touting the Mayo clinic and similar institutions as the easy answer to health care economic problems.

The big medical groups that you are so fond of obviously have their place. They're kind of interesting in that they're kind of second tier in the academic area but have great reputation in the practice area because of their ability to super-organize. This puts them in a leadership position in things like surgical specialties but from my observation their efforts to extend their systems into the community are lacking. For example there's no way the local Geisinger clinics, with their high doctor turnover, can offer the service that a good devoted established primary care doctor can provide to his patients. I'm also not very impressed with the care my patients get at the Mayo and Cleveland Clinic satellites while they're in Florida in the winter. The big organized "Clinics" are the Walmarts and the Lowes of medicine. They certainly have their place and may even become dominant, especially if medicine becomes more market oriented, but they're never going to eliminate the good local stores with their personalized service. >>

What I really wish you would look at is the attached essay on this whole subject that I wrote almost 20 years ago when I was president of the local medical society. It's a bit outdated in parts, but I'm amazed that the great majority of the piece still holds true today. The problem is getting worse and we're still not facing up to the solution.