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Medicine and the Unfree Market

Medicine and the so-called free market are incompatible in important ways. An outstanding article in the recent New Yorker by Atul Gawande makes that point from yet another new angle. (newyorker.com has a nasty habit of putting archives behind a paywall, so I don’t know how long the link will be useful.) In all the talk of consumers, insurance, and governments, we’ve kind of lost sight of the doctors. Which is odd, considering that they’re the only ones who actually know what’s going on. Let’s begin somewhere near the beginning.

The issue of cost control in medicine is much in everyone’s mind. Krugman and Ezra Klein have been out in the forefront of the fact brigade. It’s supposed to be the central feature and purpose of health care reform. There are several approaches that boil down to a choice between free markets and regulated oversight. I’ll take the two in turn.

The free market, like anything with “free” in the name, has an appealing ring of being able to make one’s own decisions without interference. It doesn’t work in medicine. At all. I wrote a post a while back about how Profits Cost Us Cures, but it goes way beyond the pharmaceutical industry and touches every aspect of medicine.

Let’s face it, most medical expenses are in a class by themselves. People don’t go to the doctor like they go to buy a car. They don’t say, “Doc, insured patients pay $357 for this type of X-ray. If you’re gonna charge $973, I’m going to Doc B.” They don’t know enough to know a good deal from a bad one, or whether they need the deal at all. Nor should they have to. We’re paying doctors for their knowledge, so there’s something very bass-ackwards in the demand that we acquire the same knowledge before theirs is any use to us.

Even more important, nobody goes to the doctor because they no longer liked their old X-rays and wanted new ones. We’re at the doctor’s when we’re in pain, trying not to think about what it could be, and desperate to get the whole thing over with. At any price. That is also the exact opposite of a situation conducive to calm and careful comparison shopping.


The whole notion that somehow patients can control the costs of medicine is such an obvious crock that if it’s being propounded by anyone smart enough to have a public platform, they must have ulterior motives. As far as I’m concerned, those motives are obvious. Putting the powerless chickens to guard the henhouse is evidence of making sure that the fox meets no obstacles.

So we can forget all the classic consumer choice blather about controlling medical costs. On the evidence, we can also forget about the insurance companies doing it. Their concept is to cut care and grow salaries, an approach that has notably failed at controlling anything. The government? Judging by the Europeans and Canadians, they can do a better job than insurance companies, but at the price of inflexibility that simply can’t keep up with medical reseaarch. For someone fighting a recently curable but not yet insurable disease, that’s intolerable. There has to be a better way.

I think Atul Gawande has shown us in which direction it lies. As he notes:

Health-care costs ultimately arise from the accumulation of individual decisions doctors make about which services and treatments to write an order for. The most expensive piece of medical equipment, as the saying goes, is a doctor’s pen. And, as a rule, hospital executives don’t own the pen caps. Doctors do.

He goes on to question why there’s so much variation in the cost of care across US counties. The most expensive is over twice as much as the cheapest.

First of all, it’s got nothing to do with cheeseburgers. Gawande compares two communities, among others, McAllen and El Paso in Texas. Same demographics, same per capita cheeseburger snaffle rate, totally different costs.

The idea that it might have to do with quality of care is laid to rest as soon as he points out that one of the cheapest counties contains the Mayo Clinic.

And that also brings him to the most interesting observation. The Mayo Clinic achieves its lowest cost, bestest care by:

  • Money coming in is pooled across the whole hospital and everybody is paid a salary.
  • Patient care is explicitly the first priority, and people are promoted on that basis.
  • They “meet regularly on small peer-review committees to go over their patient charts together. They focussed on rooting out problems like poor prevention practices, unnecessary back operations, and unusual hospital-complication rates. Problems went down. Quality went up.”
  • They have a “regional information network—a community-wide electronic-record system that shared office notes, test results, and hospital data for patients across the area. Again, problems went down. Quality went up.”

In short, the doctors get money, plenty of it, but they’re not going to get a whole lot more by each opening their own redundant MRI facility and steering patients toward it. That entrepreneurial, profit-oriented process is what’s gone wild in McAllen, aka The Expensive County.

The Mayo Clinic process is more of a one-for-all-and-all-for-one, dare I say it . . . socialist process than a purely market-driven one. It’s also open source, so to speak. Information is pooled, not hoarded.

And, it liberates doctors’ professional instincts to do their best for their patients. The same doctors who actually know what that is and how to achieve it with the least pain and anguish and expense.

An important point here is that changing only the payment method, eg single payer versus multiple payers without changing the incentive structure for doctors will not solve our problems. For me, that was a new insight. But I find it very valuable because it tells us what to do with single-payer once we get it.

Don’t laugh. I want you all to close your eyes and hum along with me . . . “Another world is possible.”

I wish.

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It’s about who decides

This has been brought on by a comment thread at Reclusive Leftist. The post was about feminism, but the thread kept veering off into abortion. Could you be a feminist and be antiabortion?

Folks, that is the wrong question. And asking the wrong question can never lead to the right answer, any more than looking for your socks in the bedroom when you lost them in the dryer is going to help you find the things.

So let’s start by asking the right question.

Maybe the first thing to do is figure out whether abortion really does kill babies. (I’m using “babies” as shorthand for “legal person with the same right not to be murdered as everyone else.”) If it does, even that’s not the end of the matter, as we’ll see in a bit, but first let’s figure that out. It’s a sticking point for many people.
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Single payer vs Public option

This is all you need. Shove this in anyone’s face who starts saying, “But, but, but . . . the guvvamint!” From a comment by Mikirivi on Krugman’s blog, a graphic prepared by Dr. Klein for the Arizona League of Women Voters:
Click on image for full size
side by side comparison of the two options

The one solitary “disadvantage” that I can see in the Single Payer column is that the insurance industry would need restructuring. I seem to remember reading somewhere that that’s over two million workers. So it’s nontrivial. But as I remember reading in the same place, most of the skills in the insurance industry are various office skills and are eminently transferable to other fields. (We could even, like, you know, help people make the switch.)

So we could have a system that costs half as much and insures everyone (“Single Payer and beyond” section in the link), or a variant on the baroque BS we have now. The choice is obvious. Baroque BS, of course.

The whole thing is eerily reminiscent of the electric car vs GM debacle. On the one hand everyone wins and GM has to be restructured, whereas on the other hand everyone loses and GM . . . .

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A sad anniversary

This has been hard for me to write. It’s part of the reason I haven’t wanted to write anything for a while. I didn’t think I’d be here at this point.

I started my blog because I was devastated that the US was torturing people. Worse, the powers-that-be were making excuses for it. The US has been guilty of crimes before. But in the bad old days that was just it: they were guilty. The thing was to pretend it wasn’t happening. Now they were doing something much worse. They were saying it was okay.

I come from a family that fled Communists, Nazis, and Fascists. (Yes, that was a lot of fleeing and it took three decades.) Maybe that’s made me hypersensitive to the ultimate personal price of dictatorships. They are horrible, awful, terrifying places and nobody really survives. You can try to escape with the clothes on your back, or become subhuman, or die. That’s all. There are no other choices. So it’s a matter of life or death to avoid that road at all costs. Never put so much as one toe on the path that ends in that hell.

There are two hallmarks shared by dictatorships: detention without trial and torture.

We’re doing both. We’re saying that committing crimes is legal. Is there any way to make the rule of law more meaningless?

At first, I never thought that people would stand for it. I knew there’d be a convulsion and the whole country would reject the lethal disease we had. But instead the shock became dulled. Too many people in the US patted themselves on the back for not being as bad as those other real dictatorships. We’d only put both feet on the beginning of the path. That was totally not the same as reaching the end.

You know what? Once you’re on that path, in terms of what happens next it doesn’t matter who started it. It doesn’t matter if you do nothing. All you have to do to reach the end is not get off. It’s downhill all the way.

I had to do something. The whole Government needed to be changed from top to bottom. The people who made excuses for it had to be changed. Corporations, media, education, it all had to be changed.

I didn’t know how to do any of that. What I did was start a blog in feeble protest, five years ago last May. I’d never understood how the Good Germans could stand by while their government went to the devil between the two World Wars. Now I know. I never thought I’d become the sort of person who could understand that.

I never thought I’d see liberals making excuses for bigotry and war, just because it was their own side doing it. I never thought it would hurt to remember how much hope I felt that the long nightmare of criminal government was coming to an end. I never thought I’d find out that it can get worse than having an unpopular dictator. You can have a popular one.

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Out of Africa: Financial Innovation

We’ve made the world a depressing place. Everywhere you look, all the good stuff is buried under a thick and powerful layer of crud. Sort of like an endless mall parking lot. Seedlings push through it every now and again. You can’t even see them from a distance and if you stepped on them, they’d be dead. But you know how it is with seedlings. In time they’re going to destroy the whole damn lot. What follows is one of those seedlings. Keep an eye on it.

Africa pioneers mobile bank push

Mobile financial services in the developing world could be worth $5bn by 2012, say analysts. . . . More than one billion people in the developing world have access to a mobile phone, but no bank account. . . . [CGAP] also expected more than one in five to use their mobile to access banking services, creating a market worth up to $5bn (£3.05bn). . . .

One of Africa’s first mobile banking system[s], M-Pesa, launched in Kenya in March 2007. A network of more than 7,000 agents – mostly shopkeepers – was set up to take deposits and issue cash, with users authorising payments on their mobile phone using a Pin code. That service has now expanded to include Tanzania and Afghanistan with plans to launch in India, Egypt and South Africa.

If we can keep this out of PayPal’s grubby monopolistic mitts, maybe some of this newfangled convenience could trickle all the way down to us. It should go without saying that we, and the rest of the world, will have to do some serious anti-spam and anti-fraud work as this gets more widespread. But you know what? That’s doable.

(Personal note: I’m back from vacation, hiatus, and general out-of-the-loopiness. Sort of. I may become loopy any time again so long as the weather is nice. And it’s always nice here in sunny Southern California.)

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