Some people are surprised that their doctor would charge them for email replies when they take more than a few minutes to prepare. One patient said (“Your Doctor Replied to Your Email. That’ll Cost $25,” Wall Street Journal, March 8, 2024):
“Patients like me who are complex patients, we require a lot of interaction,” says Falandys, who is a disability advocate.
“It just feels a little intimidating when you open the portal and the first thing it says is ‘be aware, we’re going to bill,’” she says. “We have to send these messages and we shouldn’t have to think to ourselves, ‘Should I send this?’”
The economics is simple. When a resource is used, somebody necessarily pays. We are unfortunately not in the Garden of Eden. Time is a scarce resource because it is not infinite and has alternative uses. Instead of answering emails, the doctor could spend time seeing another patient (which we would call a customer in economics), continue reading an article in a medical journal, get home earlier to see his children, or simply relax. (One can imagine the doctor reading Anthony de Jasay’s The State on a hammock near the beach, as shown on the featured image of this post.) The value for the doctor of what he (or she) would most prefer to do instead is the cost of the email. Note the concept of opportunity cost, which is what every economic cost is. (If the doctor is on an employer’s time, his cost or part of it will be shifted to the company’s; but let’s keep our model simple and ignore that.)
Somebody has to pay the cost of the doctor’s time: the doctor himself, or the customer, or the insurance company, or a third party such as the taxpayer. The only problem is who will pay or who will pay which part of the cost. It is the same with any supplier. Sometimes a supplier renders a “free” service, but it is always paid by somebody. Your appliance repairman does not charge you when replying to your infrequent emails: it’s a small goodwill gesture or marketing cost to keep you as a customer.
The market for medical services has its own peculiarities such as legally restricted competition (one way to see this is when it’s the customer who gives Christmas gifts to his supplier), matters of limbs and death, and the omnipresence of third parties such as insurers. But this does not change the reality that resources are scarce and their use has a cost that somebody must pay.
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The featured image is a courtesy of DALL-E, ChatGPT4’s artist colleague. The bot struggles to draw human figures, especially on hammocks with drinks.
Doctor relaxing on the beach, which is conveniently located just off her office
READER COMMENTS
Jon Murphy
Mar 21 2024 at 10:56am
Ms. Falandys’s comment “We have to send these messages and we shouldn’t have to think to ourselves, ‘Should I send this?’” actually demonstrates how such pricing could help her and similar patients. There are lots of people who want to talk to doctors. They are medical experts, after all. The conversations range from high-value (like Ms. Falandys’s) to low-value (say, a hypochondriac who is concerned about the effects of mercury in their canned tuna). A price for messages reduces the number of low-value inquiries and frees up space for high-valued inquries. So, with such pricing, Ms Falandy may find she actually gets more and higher-quality advice from her doctor since the doctor has more time on the margin to devote to her.
Now, all that said, one can feel for Ms. Falandys. And there may be unintended consequences (I can easily see people substituting Internet searches for doctor opinions and falling victim to various quacks). Although other businesses could form as well, such as other doctors who only charge, say, $10 for consulting. Lots of things to consider.
Pierre Lemieux
Mar 21 2024 at 11:10am
Yon: Good point in your first paragraph!
Yon Murphy
Mar 21 2024 at 11:15am
Don’t correct the typo of my name in your response to me. I am Yon now.
Pierre Lemieux
Mar 21 2024 at 11:55am
Yon: Have you thought about your reputation in DC?
Craig
Mar 21 2024 at 12:51pm
….hence the alias.
steve
Mar 21 2024 at 1:12pm
Pierre may need the alias if he is married and his wife sees the picture of a doctor he ordered DALL-E to come up with.
Steve
Jose Pablo
Mar 21 2024 at 2:27pm
Actually, it should be DALL-E the one in troubles with “its” wife.
(Although it is also true than, this time, the “prompt” was conveniently omitted)
Pierre Lemieux
Mar 21 2024 at 2:35pm
Steve: Honni soit qui mal y pense. My first instruction to ChatGPT/DALL-E was to generate an image of a doctor answering emails while having lunch. I did not like the results. I then had the idea of the book, the drink, and the hammock, but who wants to see a male in this situation? Even Michelangelo would agree. So I did ask for a woman doctor, specifying that she was still wearing her labcoat and her stethoscope, but her bikini was suspended on the tree. DAL-E had lots of problems with this request. Across many trials, there were always some important details that were wrong (including the doctor’s legs going through the hammock and the book’s title being on the back cover). I ended up with two images I found acceptable, one with the labcoat on but something else wrong (the book, I think); and this one. Then, mysteriously, many mages disappeared (it’s the second time this happened) including the other one I was hesitating about. Hence, the choice was made for me.
Pierre Lemieux
Mar 21 2024 at 2:37pm
Jose: I just saw your reply and called the Spanish Inquisition on you too.
Pierre Lemieux
Mar 21 2024 at 2:45pm
Craig: Fortunately your comment allows us to be serious again. You “need” your prescription more than other things and less than some others. It depends on your preferences, the price, and your other circumstances–your preferences and your budget constraint, in economic jargon. This is why economists avoid the term “need”–except when they express their political values or want to stake a claim for themselves.
Craig
Mar 21 2024 at 3:29pm
Just to clarify an ambiguity I am noting. Yes, I NEED the medicine but the state requires me to get a prescription. The prescription has a sense where it refers to the medicine. In other words I HAVE to talk to the doctor to get a refill, even though I’d just go and buy it.
Mark Brophy
Mar 21 2024 at 4:37pm
You should use the Internet to find out whether your doctor is a quack rather vice versa.
Craig
Mar 21 2024 at 11:43am
Good article, the onky issue I would have is that from the fact pattern there is notice they will bill, but its not necessarily clear if the patient is aware of the actual price. So perhaps patient willing to send message if it costs $25, fears it will cost $100 and doesn’t send the message even though doctor might only bill $20?
Pierre Lemieux
Mar 21 2024 at 12:05pm
Craig: Perhaps. But I suspect there are as many different ways to say this as there are medical practices. After all, it has not been many many years since most medical doctors have discovered email (and often only through their medical groups’ portals)! Another point: the WSJ story does mention that there is an insurance code for email replies, so the “patient” might not even be billed $20.
Craig
Mar 21 2024 at 12:12pm
Secondarily I suspect many emails will also be along the lines of, “Can I get a refill for my prescription?” Indeed I just recently had doctor in TN call Publix Pharmacy in FL to refilk a predcription for Losartan, a high blood pressure medication. Indeed, I would’ve paid $25 to avoid having to find a doctor in FL to give me a refill. But there’s the rub, I NEED the prescription, right?
steve
Mar 21 2024 at 1:33pm
AS Pierre notes this is still pretty new. AFAICT few private practices are charging for email time, it’s largely limited to academic practices and practices owned by VC entities or hospitals. In the latter case I know of no instance where the doc involved is actually paid more to do this work, it just goes to the employing entity. Many of those dont allow docs to set aside time to answer emails for that matter, its just been something squeezed in on breaks, lunch or after you go home.At any rate I would expect to see some price discrimination. Things like calling in refills are often done by office staff anyway so they dont use any doc time and should cost less. I fully expect, as do our marketing people, for price competition to emerge.
Steve
Pierre Lemieux
Mar 21 2024 at 2:44pm
Craig: Fortunately your comment allows us to be serious again. You “need” your prescription more than other things and less than some others. It depends on your preferences, the price, and your other circumstances–your preferences and your budget constraint, in economic jargon. This is why economists avoid the term “need”–except when they express their political values or want to stake a claim for themselves.
David Seltzer
Mar 21 2024 at 3:29pm
Pierre: Personal story that demonstrates the opportunity cost of time and the forgone returns during. I was a sole prop market maker on the CBOE. I scheduled a 1pm appointment with a tax attorney just a few blocks from the exchange. I arrived and the receptionist advised he would see me shortly. at 2p he still hadn’t seen me. The markets were active so I left and returned to the exchange. He sent me a bill for $220. I inquired as to why. He said it was for the hour I wasn’t there and he could have scheduled another client. I sent him a bill for $500 dollars as that was my average hourly return I forwent sitting in his office. I received no further contact. I made it clear my opportunity cost was more than double his.
Henri Hein
Mar 22 2024 at 12:42pm
David, that’s an awesome story and does illustrate opportunity cost nicely.
Pierre Simard
Mar 21 2024 at 4:04pm
À ce que je comprends de ton texte, le patient devrait payer sans rechigner, sans avoir pu minimalement mesurer de visu le sérieux du médecin qui lui a envoyé le courriel, ni profiter d’une rencontre pour challenger ses recommandations.
Je te joins un extrait (en anglais) d’un texte que j’ai publié récemment:
“Until the beginning of the 1980s, it was believed that doctors were altruistic, in other words that they sacrificed their self-interest for the good of the patient.
This saintly view has since been put into proper perspective. It’s now supposed that doctors are hardly different from other economic agents and that they maximize their self-interest, even their income. Sacrilegious!
In a context of information asymmetry, where the doctor has privileged information compared to poorly informed patients, he finds it easy to recommend the quantity or quality of treatments that allow him to secure his income and create “customer loyalty” by ensuring their recurring visits.”
Pierre Lemieux
Mar 22 2024 at 11:11am
Pierre: In my post, I did not make (or mean to make) a value judgment. It was a short positive analysis of the reality that somebody has to pay. So I don’t disagree with your comment, except perhaps that I would emphasize that information asymmetries are pervasive. Dell knows much more about the computer it sells you than you do; your bride knows much more about her faults than you do; and the patient has a lot of literally inside information (although I agree that he will normally bear more of the cost of a doctor’s mistake).
Pierre Simard
Mar 22 2024 at 4:55pm
Je pense toujours que l’asymétrie d’information entre un patient et son médecin conduit à une demande induite et à une surfacturation… donc qu’elle a nécessairement un impact sur la facture que tu reçois. Bref, je ne lis probablement pas la même littérature économique que toi. Cela dit, je ne suis pas un spécialiste des jugements de valeur ni de Dell, ça ne m’intéresse pas vraiment.
Matthias
Mar 22 2024 at 9:22am
I’m not sure that’s a good sign?
Back about a decade ago I was supplying my labour to Google (ie I worked at Google) and they gave me Christmas presents.
Programming is one of the few highly skilled fields left that doesn’t have any legal barriers to entry like occupational licensing.
Pierre Lemieux
Mar 22 2024 at 11:01am
Matthias: That’s a very good point. I thought about this possible objection when I was writing my post; thanks for pushing me to think again. I suggest that the answer is the following. Employees do sell their labor services to their employer, but their relation to the latter significantly differs from a supplier-producer relationship on the open market. The reason, as Ronald Coase explained in his seminal 1937 article “The Nature of the Firm,” is that the firm exists precisely to take the employee-employer relationship out of the spot market. Add to this that, with 2oth-century labor laws, the firm had better cajole its employees. If, instead of an employee, you had been a consultant or contractor for Google, I suspect you would have given a bottle of wine to your boss instead of the other way around. As for larger bonuses, they are just the conditional part of the salary.
Ron Browning
Mar 24 2024 at 7:50am
Pierre: The word “every” in :
“Note the concept of opportunity cost, which is what every economic cost is.” Makes me wonder if this statement is consistent with James Buchanan’s, “Cost and Choice”. Following your link to David Henderson’s description of opportunity cost seems to show Henderson’s understanding clearly at odds with Buchanan’s.
Pierre Lemieux
Mar 25 2024 at 12:20am
Ron: That is a very good question. My characterization and David’s are the same, as you note. I think that they are consistent with Buchanan’s, who (from memory) emphasizes that, for the entrepreneur, the opportunity cost is forward-looking, because the second-best alternative not chosen is subjectively estimated and never realized. But I am not sure I understood Cost and Choice correctly and I should probably re-read it. Perhaps you can elaborate on your point?
Anders
Apr 4 2024 at 3:28pm
Perhaps this illustrates why European public health care systems, albeit also riddled with inefficiencies, achieve same or better health outcomes at 10% of gdp rather than 20, and at less than a third in absolute costs, compared to the us? Not to mention that people do not need to worry about it or decline to switch jobs simply for the risks of losing coverage?
Not an option for the us because of lobbies and costs, of course. But a fraction of public health spending alone would be enough for public funding of high cost medical care, say a fifth of income above the median. That would leave the remaining 80% of health spending to be subject to competition and entrepreneurial initiative and use of ai and technology. I think with time costs would come down radically and quality improve. And noone will have to fear choosing between health care and financial ruin. And that problem of asking simple follow up questions to your doctor? Trust some startup to show the way…
American liberals, or libertarians if you insist, what am I missing? True, ama and incumbents will fight it tooth and nail, but what befuddles me is that a simple solution like that is nowhere to be heard in the discussion at all, yet all Americans I proposed it to liked it. Left and right, including some clinging to the strawman of dystopia that is Canada…
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