Topic: Health Care & Welfare

AMA Curing Competition, Part Deux

I’ve received a couple of thoughtful e-mails from Dr. Thomas Davis (the Missouri physician, not the legendary basketball coach) concerning my earlier post criticizing the American Medical Association for wanting to rein in the emergence of retailer-based health care clinics. With Dr. Davis’s permission, I’m posting a few of his comments for readers’ consideration.

First, lest anyone want to straw man Dr. Davis as a pro-regulation, anti-market, rent-seeking weasel, he writes:

I would prefer a world where a patient can get any medication over the counter without a prescription, where doctors are not licensed, there is no insurance and patients paid cash at the time of service. Health care would be far more efficient and transparent in such a world.

He also stresses that he is not a member of the AMA and that he has some serious qualms with the organization.

Dr. Davis raises three concerns with the in-store clinics:

  1. If they are operating without direct physician supervision, the clinics lack important medical expertise, and many customers could suffer unnecessary medical expenses (not to mention pain and suffering) from undetected or misdiagnosed afflictions.
  2. If the clinics siphon off customers who are seeking annual checkups or treatments for minor problems, traditional MD practices will become financially strapped, affecting the care of patients with more complex medical problems.
  3. The in-store clinics’ business model could create perverse incentives for their employees and for tort lawyers, who may likely see the major retailers’ clinics as deep-pocketed malpractice suit targets.

Readers can make up their minds on these points. As with most thoughtful arguments, I believe there is some merit to each, but not enough to change my opinion that the clinics are a welcome addition to the health care marketplace.

Indeed, a comment Dr. Davis makes in his second e-mail supports this idea better than anything I could write:

My point is not that these clinics are “bad.” The competition in the short run is probably a good thing, and I can out-compete Wal-Mart on the delivery of high quality health care any day.

That, I take it, is a sentiment we all want to hear from health care providers.

Well That’s Another Fine Mess You’ve Gotten Us into

AARP and Families USA are screaming about rising prescription drug prices, without and within Medicare Part D. The New York Times is calling for price controls on drugs purchased under Part D.

A 2004 study by the Manhattan Institute estimated that applying the type of price controls found in Medicaid and the Veterans Health Administration to Medicare would reduce pharmaceutical R&D by nearly 40 percent and reduce Americans’ aggregate lifespans by 277 million life-years.

In other words, the logic of “negotiating drug prices” is that everyone under the age of 65 should die one year sooner so 42 million geezers (sorry, Dad) can save a few bucks on Lipitor. But is the logic of opposing price controls that workers should have to pay through the nose to pump these geezers full of drugs?

Part D puts us all in a no-win situation: either pay up and bankrupt the nation or control prices, suppress R&D, and prepare to check out early. It is a trap, set by the Left and sprung by the GOP.

That’s why – if the repeal train has left the station – the only sane option left is a radical overhaul of the entire program. With a little luck, Republicans will come to see the box in which they have put themselves and rediscover their interest in Medicare reform.

AMA: We’ll Cure Those Market Forces

It should have been an invigorating story for free-marketers.

Saturday’s New York Times describes how competition from health care clinics in retailers such as Wal-Mart and CVS is pushing traditional doctor offices to be more responsive to customer needs:

Professional societies for family doctors and internists are urging their members to break with tradition by making it easier to schedule appointments — or even making appointments unnecessary in the case of walk-in patients who need immediate attention.

“It’s a big trend,” said Amanda Denning, a spokeswoman for the American Academy of Family Physicians, which has about 94,000 members.

The academy is spending $8 million on consultants who visit doctors nationwide to suggest improvements in patient care. The advice is meant to “keep them from going to an in-store clinic,” Ms. Denning said, while also benefiting doctors by making office procedures more efficient.

Speedier appointments for patients who need immediate attention, more efficient office operations, and (the article later states) increased doctor office revenues as more (satisfied) patients are treated. American health care would certainly benefit from such a shot-in-the-arm.

So, naturally, the American Medical Association wants to perform a competition-ectomy. The Times goes on to report:

At its annual meeting this month, the American Medical Association called on the clinics to accept a list of principles that would limit their scope to simple services and ensure that a physician oversees the operations.

“Patients want quick and easy access to health care services, but they shouldn’t have to worry about the safety and quality of care provided in these clinics,” said Dr. Rebecca J. Patchin, an A.M.A. board member.

Once again, the AMA is making sure health care providers will do no harm … to AMA members’ bottom lines.

Clive Crook on the Massachusetts Plan

Clive Crook writes (note: link probably will expire in a month),

How to do national health reform worthy of the name? First, and most important, create a level playing field tax-wise for individuals and firms, so that nobody has a financial incentive to prefer employer-provided insurance to the individually purchased kind. You could do this by extending Connector-style tax relief to all taxpayers, or by abolishing it for employers. Abolition would be better. It would raise a lot of revenue (which will be needed in my plan) and would jolt people into changing their insurance arrangements.

Second, the free-rider problem makes the case for an individual mandate compelling, in my view. Massachusetts is right about that. And the mandate, in turn, makes health subsidies for the poor, which would be desirable in any case, unavoidable… . But to avoid the enormous problems of enforcing and administering the mandate … give everybody a voucher sufficient to buy stripped-down, Connector-style coverage.

Third, impose one other global restriction on insurance companies: If they offer a policy to anyone, they must offer that same policy to everyone, regardless of age, sex, current health, and other risk factors. Again, the Connector has provisions of this kind. This would preserve the risk-pooling feature of private insurance, while still allowing vigorous competition on price and offering.

I strongly disagree with the third point. As I pointed out here, it is these sorts of regulations that aggravate the problem of the uninsured in the first place. Force insurance companies to offer the same policy to everyone at the same price, and naturally health insurance will be a bad deal for young, low-risk people. Like Massachusetts, you will end up with a problem of such people being uninsured. As I said in my talk, the Massachusetts plan at best solves a problem that was created by regulation in the first place. Listen to the talk.

“Cursive Is Illegal”

Evergreen State elementary school teachers, take note: Olympia is moving against some of your more affluent failures.

Everyone knows that doctors’ horrible handwriting causes problems for patients and pharmacists.  As of this month, it is illegal for doctors in Washington state to write prescriptions in cursive.  (Will italics be next??)

The sad thing is that health care markets have become so calcified that this really, really dumb law might actually enhance efficiency.  I just hope we won’t have to wait long before some medicine-socializer argues that this proves that government planning is superior to free-market health care.  (Any takers?)

Big Government Health Care

I have been trying to make the point that we cannot magically make health care affordable by having our health care services paid for by the government. I have been trying to use Medicare and Medicaid spending to make that point. Now, Laurence J. Kotlikoff and Christian Hagist have found a good way to make it.

European critics of the U.S. health care system often focus on the private provision of health care and health insurance. Yet the more important difference between the United States and other developed countries is the failure to control government spending. Other countries employ global budgets and control access to expensive drugs and new technology. The United States, by contrast, has very meager spending controls. If current trends continue, U.S. government health care spending will consume an ever growing portion of national income — far more so than any other developed country

…If current trends hold in the United States, by 2050 government health care spending will claim one-third of GDP.

I added the emphasis on the word “government.” The point is that even if we only have government pay for seniors and the poor, our government system will outspend other countries’ government systems that pay for everyone.

What’s different about America, as I argue in Crisis of Abundance, is that we do nothing to constrain the use of premium medicine (specialists and high-tech procedures.)

Fuzzy Math

This one is a few days old, but last week the Bush administration lowered by 500,000 its rah-rah-Medicare-Part-D estimate of the number of seniors with drug coverage. Seems they double-counted half a million veterans who had enrolled in a private Part D drug plan. Oops.

Two observations.

First, given the administration’s track record, journalists should just start using disclaimers like, “Remember, these Medicare figures were provided by the Bush Administration. Wink, wink.”

Second, I’m not a big fan of either Part D or the Veterans Health Administration. But left-wingers love the latter and hate the former. I wonder how they explain veterans leaving their preferred model for the one entitlement program they detest.