A Free Market in Health Care

House calls still happen, but labour wages for doctors are now so high that the costs generated as travel time are no longer worth the expense.

Unless you’re a doctor contracted to see the employees on-site for mass regular checkups. Hence, ‘house calls’.

First of all, sorry to hear your wife was sick. I hope she is feeling better.

I think you have put your finger on a feature that any health care system should have, even a government run system. With non-emergency care, people who are willing to pay for shorter wait times should be able to get shorter wait times. People who expect to pay a lesser share of the cost should wait longer.

Very. Cool.

I hope you will update this with any subsequent observations about the quality of the service you received.

Do these guys serve Canada? They should advertise up here. I’m going to bookmark them.

I’m sure many of my traditionalist physician colleagues would note that one can’t do a physical exam–traditionally one of the hallmarks of a standard physician visit–over the Internet or via apps. But then again, you pay more than $38 for a traditional office visit. (I wonder what legal liability the service faces for misdiagnosis based on not performing a physical exam?)

The irony is that even in a current typical office visit, based on several personal experiences recently, one no longer gets what was in the past standard treatment. The detailed physician-obtained history is replaced in large part by patient-filled-out questionnaires provided by the front desk at check in. One no longer has to disrobe for most visits, and blood pressure measurements, lung and cardiac auscultations, and abdominal palpations are all done through street clothes, something that would have led to failing grades a generation ago. I get the strong impression these are now perfunctory and largely ritualistic acts, no longer the essence of physician diagnosis passed on from generation to generation.

Why the change? It might be (at least) one or more of the following: to maintain their incomes, physicians must see more patients per hour, so less time is available for thorough physical exams and detailed questioning; advanced imaging (CT, MR, US) make detailed exams less important, in the sense that even if you miss something, you’ll eventually order a test that will show the problem; today’s doctors emerge from medical school training that no longer even teaches the subtle details of physical exams.

But of course, all industries change and evolve over time. It’s not clear knowing how to do good physical exams is any more important for physicians today than knowing how to shoe horses is important for a Lexus mechanic.

The problem, of course, is that all of this change is occurring without anything remotely resembling a free and unregulated price system, and therefore no way of knowing whether any of these changes move in the direction of greater social efficiency or away from it.

@Michael Cannon,
Very. Cool.
I hope you will update this with any subsequent observations about the quality of the service you received.
Thanks. Of course, it will be hard to judge quality, as Tim Ozenne points out in a comment below yours.
@Katharina,
Good to know your wife is feeling better and that the Just Answers website worked well for her.
Thanks, and, furthermore, it warms the cockles of my teaching economist’s heart to see that you correctly linked it up with Pillar #5.
@Phil,
Do these guys serve Canada? They should advertise up here.
Good question. I know that it’s illegal to sell most services covered by Medicare (Canada’s single-payer system) in most parts of Canada. But it would be hard for the government to enforce across borders. I’m guessing that it would be clearly illegal to advertise in Canada, though. Of course, is advertising on the web really advertising in Canada?
@caltrek,
Sure, it is cool that a live person was contacted for a small additional fee. This would be a fair arrangement if all had the same income and wealth. Given an inequality in income and wealth, a certain class stands to better benefit from this “market” feature. I suppose if you are a member of that class, you are motivated to cheer for that outcome.
Actually, it’s fair for everyone. It gives rich and poor an option they didn’t have. Notice the price, caltrek. It’s one that even fairly low-wealth people could occasionally afford. If we wait until there’s total equality of income and wealth before allowing new products and services, we will wait forever and everyone will be worse off. Ask yourself this: did you think, back in 1988, that over 70% of the population would have cell phones by now? But I’m sure that the rich got them first.
At any rate, my best wishes for a good outcome for Mrs Henderson.
Thank you, caltrek.
@Ted Levy,
Thank you for those insights. Those changes you describe were so gradual that I hadn’t noticed them. Thanks for reminding us.

@ caltrek: So, by finding a cheaper way to provide a service, the market only “reproduces the fundamental inequalities that already exist within our society”? Maybe so, but at least it is progress. What manner of system would you prefer; and if it prevents innovation or impedes improvement, how fair would it be to future generations? If equality means a lower standard of living, would you embrace that?

“In recent years, virtually all of the benefits of increased productivity have gone to the wealthy.”

The third world has benefited greatly. Do they not count? Does the 99% not include the 95% who don’t live in the U.S.?

My district health board recently was made to publish an annual list of how many people died while on public hospital surgery waiting lists.

Jim Rose: There’s no question that SOME people are better off with universal healthcare legislation becomes law. It’s actually quite difficult to write legislation that doesn’t benefit ANYONE. But there’s a big difference between saying a law benefits some group (often called “special interests”) and saying it benefits society as a whole.

Costard: So, by finding a cheaper way to provide a service, the market only “reproduces the fundamental inequalities that already exist within our society”?

caltrek: Thereby missing my point about how all of the benefits of increased productivity have gone to the wealthy.

Costard: What manner of system would you prefer; and if it prevents innovation or impedes improvement, how fair would it be to future generations?

caltrek: If the benefits are not shared on a fair basis, then what is to prevent future population segments from not having their fair share?

I have already conceded that some market incentives will be needed to promote development. That does not mean that resources should be allocated exclusively through the market place. Who is to say that an optimal solution would not involve a mixture? Even in Mr. Henderson’s example, I point out the role of the internet, a technological development that involved government in its initial technologolgical development and regulation in order to get started and operate.

Costard: If equality means a lower standard of living, would you embrace that?

caltrek: A more refined explanation and description of “lower standard of living” would be needed. Lower standard for who? Why would the sacrifice be needed? How can the free market crowd insist that it has the most optimum solution, and then turn around and imply that it’s solution might not be fair and that a fair solution might involve a “lower standard of living”?

Costard: The third world has benefited greatly.

caltrek: Oh really? I suggest you read Confessions of an Economic Hit Man by John Perkins before coming to such a conclusion.

Remember, there are competing systems of development out there. It is not at all clear which system is the best. Certainly, no system to date has depended exclusively on the free market. All have involved some mix, at least to my knowledge.

Mr. Perkins book clearly demonstrates that actually existing modern day capitalism, in partnership with U.S. government and international aid agencies, have been far from a completely constructive force in the development of the “third world”.

So what’s the problem here?

This “innovation” -and it clearly has its shortcomings (how do you know how qualified this “specialist” is and why do you assume a specialist is always preferable?) – came about under our current system, didn’t it? We didn’t need a more “free-market” system for it to exist.

So, I repeat, what’s the problem here?

http://ourhealthcaresucks.com/obamacare-the-good-the-bad-and-the-missing/

Firstly, as a physician, I extend my wishes to your wife for good health and pleasure that she got what she (and you) needed from the experience.

As an MD-systems theorist (meaning I am trying to practice good medicine … on healthcare), I applaud your demonstration of one of the root causes of sickness in the US healthcare system: disconnection.

As long as patients are disconnected from their money;
as long as incentives are disconnected from behaviors;
as long as desired outcomes are disconnected from the rewards that would facilitate such outcomes,
the system cannot work. That is what I emphasized in Uproot US Healthcare, a doctor’s approach to a sick patient named Healthcare.

Your example shows what connection (or possibly re-connection) can accomplish. Joel Brenner in Camden, NJ, showed this even more dramatically. Read about him or read my book(s).

Thank you.
Deane Waldman

@caltrek: I didn’t miss your point. I did however apply it to subject of this thread: $38 medical advice. Was that a mistake? Perhaps you have a blog, or some other venue more appropriate for the discussion of things that have little to do with the OT.

“If the benefits….”

Shared on a fair basis? Future population segments? You’ve lost me. In any event the Internet is a good example of the market turning swords to plowshares. Its development into something more than a defense system was the unintended result of individuals adapting it to private use, both academic and for-profit. And initially only the privileged had access to it. Would you, at the time, have dismissed those first efforts at privatization as inherently unfair, and denied us the Internet on the basis of the “fundamental inequalities” of the market?

“How can the free market crowd insist that it has the most optimum solution, and then turn around and imply that it’s solution might not be fair and that a fair solution might involve a “lower standard of living”?”

This has gone far off-topic. I’ll simply point out that equality is not fairness, and neither one is justice. “Optimal policy” is a function of what you are optimizing.

“Oh really? I suggest you read….”

Mr. Perkins may be able to clearly demonstrate your point, in which case, you should let him do so. But assigning homework isn’t likely to convince anyone. Putting it simply, the American laborer’s loss has been the Chinese laborer’s gain. Whether the worker realizes these benefits, or instead they fall to his boss and the Party, is in turn a function of Chinese policy. The fact remains that they are a poorer country than we – their working class more unfortunate than ours – so by your own logic, isn’t this fair? It has little to do with American policy and even less to do with free markets, and whether it is constructive or not is an entirely different discussion.

What is really, really scary, is to realize how many people there are in the world, who think like caltrek.

It’s a wonder progress happens at all.

Patrick Sullivan said above: “I’m old enough to have experienced free market health care–if we ignore occupational licensure laws.”

I suspect Mr. Sullivan would enjoy learning much from the excellent history of US government intervention in medicine (which unless he is a candidate for the Guinness world records, long predates his birth) written by the exemplary (and recently, and sadly, deceased) historian Ronald Hamowy: Government and Public Health in America. Government intervention in American healthcare began in the late 18th century and drastically expanded in the late 19th and early 20th centuries. Far more than licensure laws, though that was a major goal of entrenched physician guild interests.

Caltrek seems to have a fundamental misunderstanding of how markets work. He thinks because I cannot provide a detailed blueprint for the future, the market cannot provide what is desired in the future. That is, he doesn’t understand the nature of incentives.

Further, he DOES seem to think that because government officials make detailed promises, this is some guarantee the promises will be fulfilled. That is, he doesn’t understand the difference between intent and result.

If Caltrek would spend just a moment looking throughout his day he’d find literally scores of services available to him that he now uses routinely which were not merely out of his price range a mere two decades ago, but didn’t even exist (which is to say, had an infinite price). And now he can afford them, and so can most of America’s poor. There is no question–and I speak as a physician–the same thing could happen in healthcare if the government would just get out of the way. Professor Henderson’s example in this post is just one mere hint of what is potentially possible.

@caltrek,
Who runs those schools that you discuss above?