As a physician thoroughly frustrated with our State medical apparatus, I read a large number of opinion pieces and news articles on its perceived woes and proposals for its reform. Though I have read some excellent works on these pages and at the Mises Institute site, the majority found in the popular media reek of economic ignorance and worship of the State. Most private physicians knowingly groan when they encounter such garbage, and simply go about the business of their day caring for the sick in the often impossible system which they find themselves. In sharp contrast, many in academic medicine and professional societies such as the AMA cheer, spread it amongst their colleagues, and write additional State-supporting propaganda, the latest of which to come to my attention was the proverbial straw for this camel, and from which I include a particularly remarkable quote:

“It would be such a shame if we once again fail to cover the uninsured because of hang-ups over costs. Physician decisions drive the majority of expenditures in the US health care system. American health care costs will never be controlled until most physicians are no longer paid fees for specific services.”

So begin the fantasies of yet another healthcare dictator in the making, proceeding to issue his decree specifying exactly which types of medical services should and should not be provided in this country. At the stroke of his mighty pen, many common services demanded by patients are restricted or (even better) prohibited. Today he limits his list to seven broad categories, including coronary bypass, angioplasty and stenting, prostate cancer screening and treatment, mammography, and CT/MRI (which he interestingly refers to as “art forms”). Tomorrow, who knows which unthinkable ways he will devise to save money for his benefactor the State. Forget the decisions of millions of patients and physicians across the country, they’re wrong, all wrong. After all, unlike us common grunts providing the care he seeks to limit, he has the proper credentials! He’s used his medical degree to specialize in pathology, work as a professor, laboratory director, journal editor and now “serves” as President and Chair of the Board of The Lundberg Institute, named for himself, whose mission is to “forge a patient-physician alliance based on trust, providing leadership, strategies, and communications that promote evidence-informed, efficient, and effective health care delivery to benefit the health and well-being of patients, physicians, and the public.” While possessing a truly impressive rsum in the academic world, it is woefully devoid of virtually any experience in that one often messy matter which is the essence of the profession: actual face-to-face contact with living, breathing patients. To summarize, perfect for our newest Czar.

One would understandably be excused for choosing not to read his decree in full, but near its end we are blessed with another treat. “Academic medical centers should take the lead, rather than continuing to teach new doctors to ‘take the money and run’.” Yup, yet again, he’s spot on! After all, that’s the exact take-home message I got during my seven years of exhausting around-the-clock education and training at academic medical centers. Ethics? Nope. Squeeze those sick suckers for all they’re worth, their health be damned! Never mind that during most of those seven years my colleagues and I could have been pocketing six-figure salaries in law or six-plus-figure bonuses on Wall Street rather than accumulating education-related debt. Maybe some physicians don’t resent his (and our President’s) accusations that we base our clinical practice decisions purely or even primarily on income, but I sure do.

While I agree that physicians commonly order tests and perform procedures that are medically unnecessary, this fact is due to two main reasons the author completely fails to mention: first, the tort system, which terrorizes doctors in their practices on a daily basis, and second, that patients have minimal if any financial stake in their care. As a consequence, they demand everything in excess, and are often angry when we suggest a desired test or treatment is not indicated, no matter how much time we spend trying to educate them. When people don’t pay for something with their own money, they hardly care about costs. They just milk others for all they’re worth, because after all, that’s what they perceive everybody else is doing to them, too.

Physicians have two options. We either serve the patient, which increases costs primarily to the State (for many physicians, it is the largest payor), or serve the State (and insurance companies) by limiting care and in so doing expose ourselves to increased customer ire and legal risk. For most, the choice is easy. Others, often rather conveniently insulated from such issues as customer preferences, anger, reimbursement, and legal risk, resort to utopian fantasy and contorted illogic to justify their servitude to the State, all while concealing their wolf-like aggression in the sheep’s clothing of nonsensical platitudes such as the mission statement of the institute quoted earlier.

It is not our responsibility as physicians to deny access or limit desires, other than by informing patients of risks and benefits, sticking to our oath to do no harm, and by charging a fair price. If someone wants to spend many thousands of dollars of their own money on larger breasts, that’s their business. Only they can judge if the money and the risk of surgical complications including anesthesia-related death is worth the benefit of a new bra size. However you might disagree, you have no right to decide for them. Incidentally, such cosmetic procedures are one of the few areas in medicine where costs have been driven ever lower as quality only improves. The reason? Plastic surgeons generally only accept patients who actually pay the price they mutually agree upon, compared to the majority of physicians who must accept State-mandated rates (and frequently no payment whatsoever) in exchange for the “benefit” of additional paperwork, regulation, and clipboard-carrying overseers. Essentially, free market vs. State market.

Referring back to the initial quote, if physicians aren’t paid fees for services, then what exactly should we be paid for instead, and by whom? A flat salary for providing “healthcare” from the State, or from some State authorized co-op or State-regulated “insurance” company? For checking the right boxes on a form, for adhering to scientifically absurd “best practice” guidelines, for incentives to keep a patient healthy and out of the hospital no matter how many packs per day he smokes or motorcycles he chooses to crash while riding drunk and unhelmeted? Yeah, that’ll work. Well, it might, if we just outlaw alcohol, and cigarettes, and motorcycles, and stupidity.

Here are some parallels that expose the utter ridiculousness and complete ignorance of economics revealed by his claim:

American plumbing costs will never be controlled until most plumbers are no longer paid fees for specific services. American grocery costs will never be controlled until most stores are no longer paid fees for specific foods. American computing costs will never be controlled until most technology companies are no longer paid fees for specific products.

Oh, imagine how much better it would be if plumbers, groceries, and tech companies were instead paid by the State to provide equal access for all Americans to their products and services!

Would expenses skyrocket, because plumbing, groceries, and computers would be “free,” and people would demand all the toilet-unclogging, truffle-eating, and number-crunching that other peoples’ money can buy? No! Instead, by Dr. Lundberg’s reasoning, demand would skyrocket because plumbers, grocers, and electronics stores “drive the majority of expenditures!” The customers (citizens, serfs, proles) are clueless! They care nothing about price, they care nothing about quality, they care nothing about risks or opportunity costs, they are too stupid to know anything at all! They just do whatever the greedy grocer tells them, such as “BUY MORE SPINACH!!! HA, HA, HA, HA!!!” So, of course, we must take care of them.

So how could costs be controlled? How could the State achieve its aims? Just how exactly would it work? Simple, a bureaucrat or even better a “blue-ribbon” panel of bureaucrats would get to declare that no one needs more than 2 GB of memory on his computer, or more than 3 apples per week, or a toilet with more than 1 gallon per flush (OH WAIT! They ALREADY dictate that to us!). Of course, any APPROVED graphic designers, or bakers, or influential friends in high places could obtain special State permission for an exception, even through lobbying and “donations” if necessary. And going further, that such important items as these must pass rigorous State standards and regulations, and therefore can only be purchased from licensed entities such as Halliburton Computer Company, or Goldman Sachs Apple Orchards, or General Motors Plumbing! See how the web of power and control works! Of course, prices could not be allowed to rise, so the plumber would be paid no more than $50 for unclogging a toilet, the grocer no more than $0.25 per apple, the tech company no more than $200 per desktop computer.

How would the plumber, the grocer, and the tech company respond? Would they bask in the glow of the State’s beneficence? Perhaps, shielded from competition with their executives ensconced in Aspen or St. Martin, but they’d still plumb fewer toilets, grow fewer apples, and make the crappiest computers you’ve ever had the pain of trying to use, while customers remained on waiting lists for months just for the chance to redeem their quota. In disgust, their best employees might even decide to take up carpentry instead. In fact, about half of physicians in a frequently cited though controversial poll have admitted considering similar measures if another thousand or so pages of preposterous power-grabbing healthcare law is passed in the near future. Admittedly, I don’t think half will quit, but in my circles the number making such considerations, particularly to cut back their practices significantly while exploring other career options far exceeds half.

Forget freedom, forget choice, forget customers actually informing themselves about what they do or do not wish to purchase with money they have actually earned themselves, all because many in this country have been brainwashed into believing that our so-called “free market” doesn’t work, is broke, kaput, out of service, and that the classic conception of individual rights is helplessly pass, replaced instead with their newfangled “progressive” misconception of rights such as a right to healthcare, a right to affordable housing, a right to food, and a right to whatever anybody wants anytime (except when it costs too much, whereby your rights will be modulated by your rulers to fit their budget!).

Some other essential points to round out the picture while I’m at it:

State “insurance” is not insurance. It is money taken by force from some to pay for the medical care of others. In the case of Medicare, it is also money taken by force from some to pay for their own care, though they may very well prefer to use said money for other purposes. This is wrong. Period. Arguing for expansion of such programs is therefore also wrong. If Medicare were an insurance company, it would be out of business, or its executives in prison, or both. Most private insurance is not insurance (health savings accounts coupled with high-deductible plans excepted). It is prepaid care, or care paid for by a third party, usually an employer. Insurance does not usually cover routine expenses (e.g. homeowner’s doesn’t cover window washing, auto doesn’t cover tire changes). Insurance is a voluntary agreement whereby an individual pays a portion of current resources in order to protect against a potential future large loss. The reason private medical payment is structured in such an unnatural way is a direct result of the employer tax-deductibility of health insurance, which has been in effect since the World War II era as a direct consequence of State price and wage controls. True insurance, such as HSAs, tends to reduce costs compared with State programs, as Whole Foods CEO John Mackey has explained recently to much liberal consternation. We are not operating in a medical free market, or anything that comes anywhere close to approximating one. When the State already spends approximately half of all healthcare dollars, we are operating in a half-socialized market. When the State endlessly regulates providers and payors, and engineers a system where employers rather than patients pay for “private” care, we have even less of a free market.

State interference in the free market is the number one reason for the cost problem in healthcare. It has increased demand through programs such as Medicare and Medicaid, and by making even those with private insurance relatively unconcerned about prices. It has also limited supply through professional licensing laws, patents, certificate of need requirements, and other innumerable regulations. The State, not physicians, is “driving the majority of expenditures in the US health care system.”

In the absence of State intervention, charity care would be provided, and in abundance. The uninsured and the indigent would have a place to go, to be cared for, even more so than they do today. Imagine, if the State stole less of your income, if it deprived you of less of your life, if it regulated and ruled you less, if you were faced with gratitude rather than entitlement, would you be more or less likely to contribute to charity, and to provide charitable care?

Medicine is not fundamentally different from any other product or service. Medical services have a monetary value. Consumers can be educated on the value of medical services. If they can learn about such esoteric concepts as computer memory, processor speed, hard disk size, monitor resolution, internet bandwidth, etc., then they sure can learn about the risks and benefits of prostate surgery. Physicians are just one of the many sources of education for them. The internet is the great equalizer and educator.

The only reform that isn’t some scheme to increasingly violate individual rights in a vain and misguided attempt to defy the laws of economics, which is to say our essential human nature, is to free (repeal State programs and regulations) rather than to even further socialize medicine.

October 21, 2009

The Best of Michael Scott, MD