Hmm… You Should Have Someone Look at That

Americans usually criticize socialized health care systems for forcing patients to wait for care, so it’s a curious thing to find American patients waiting. It happens. I’ve weighed in on Americans waiting for care, as have Tyler Cowen, Matthew Yglesias, Ezra Klein, and others.

Today’s New York Times now informs us:

Patients seeking an appointment with a dermatologist to ask about a potentially cancerous mole have to wait substantially longer than those seeking Botox for wrinkles, says a study published online today by The Journal of the American Academy of Dermatology.

Researchers reported that dermatologists in 12 cities offered a typical wait of eight days for a cosmetic patient wanting Botox to smooth wrinkles, compared to a typical wait of 26 days for a patient requesting evaluation of a changing mole, a possible indicator of skin cancer.

The article also provides this interesting contrast:

Dr. Michael J. Franzblau, a dermatologist in San Francisco, said doctors typically charged $400 to $600 for a Botox antiwrinkle treatment, for which patients pay upfront because insurance does not cover it.

Meanwhile, doctors have to wait for health insurance to reimburse them for mole examinations, for which they receive an average of $50 to $75, Dr. Franzblau said.

This article reminds me of a 2005 study that called ambulatory clinics to see who is most likely to get an appointment for follow-up care after an ER visit. The study found, roughly:

  1. “Four hundred six (47.2%) of 860 total callers and 277 (64.4%) of 430 privately insured callers were offered appointments within a week.”
  2. People with private insurance and those who offer to pay cash up-front were more likely to get an appointment than Medicaid patients, who in turn were more likely to get an appointment than patients who offered to pay $20 up front and pay the balance later.
  3. Nevertheless, one-third of those with private insurance – and even those who offered to pay cash up-front – still couldn’t get an appointment.

When I discussed that study with my colleage Peter Van Doren, he described it (with precision) as “an out-of-equilibrium situation not resolved by the price mechanism.” With regard to Medicaid, it’s easy to see what’s interfering with the price mechanism: Medicaid prices are set by state governments, and so they don’t change to eliminate shortages (i.e., waits) the way market prices might. The same is largely true of private coverage: those prices are set by insurers, who mostly just track the prices that the federal government sets through the Medicare program [$].

But then why would there still be shortages for patients who come with cash in hand? The price mechanism seems to be working for cash-paying Botox patients, but not for cash-paying ambulatory clinic patients. One possibility is that there might be spillover effects that affect cash-payers in markets dominated by third-party payment and rigid prices. But then wouldn’t we see cash-only ambulatory clinics emerge to capture those customers? If not, that suggested supply constraints to Peter and me.