More on Health Care

September 13, 2009
  • Politics

The Atlantic has a great article on the total mess that is the health care industry in America that can be found here.

Again, the article doesn't deal with HOW medical treatment is funded. Most of the discussion in Washington is about public options vs insurance cooperatives, free market vs a fully socialized system. But this is an issue of who how the money gets into the hands of doctors, hospitals, and pharmaceutical companies. And while this discussion is important, it's not at the heart of the issue. The real issues with America's health care industry comes from the backward inscentives that are placed on doctors, patients, and hospitals. As the article points out,

"Every time you walk into a doctors office, its implicit that someone else will be paying most or all of your bill; for most of us, that means we give less attention to prices for medical services than we do to prices for anything else. Most physicians, meanwhile, benefit financially from ordering diagnostic tests, doing procedures, and scheduling follow-up appointments. Combine these two features of the system with a thirdthe informational advantage that extensive training has given physicians over their patients, and the authority that advantage confersand you have a system where physicians can, to some extent, generate demand at will.

Do they? Well, Medicare spends almost twice as much per patient in Dallas, where there are more doctors and care facilities per resident, as it does in Salem, Oregon, where supply is tighter. Why? Because doctors (particularly specialists) in surplus areas order more tests and treatments per capita, and keep their practices busy. Many studies have shown that the patients in areas like Dallas do not benefit in any measurable way from all this extra care."

Because doctors and hospitals are paid based on the procedures they use, and not based on how healthy their patients are, then their focus, even if only subconsciously, will be on the means and not the end result. This, of course, is pretty obvious. If everybody were 100% healthy, then many doctors would be out of the job. If razors lasted forever, then Gillette would lose a lot of business. If batteries and light bulbs didn't break regularly or run of of juice so quickly, if computers didn't die spontaneously after 3 years, etc etc

Doctors should be paid to keep people healthy (first and foremost) and to heal when necessary. They should not be paid by the cat scan. I'm not just being idealistic. Doctors and hospitals all around the world function this way. The Mayo clinic pays doctors salaries, which frees them from the burden of thinking about money and financial incentives. Costs almost automatically drop and the result is healthier patients on average.

Why can't we attack the real problem instead of skirting the issue. Why are we more concerned with telling people that they "lie" than with being constructive and finding common ground. Changing incentives isn't a Democrat or Republican thing, it's something that can be agreed on by both parties (unless you're a pure Libretarian, but don't get me started with that).

There are ways to change American health care for the better, and that certainly would be change that I can believe in.