Saturday, June 7, 2014

Patients, Doctors:  Inside, Outside

 I will not pretend to show that a free market in medicine would be utopia or would solve all problems once and for all.  There is no utopia.  I will only maintain that a free market is the best of available alternatives and one that does the least harm. Free enterprise does not create a system that is at equilibrium and is free of errors and problems.  There are systems like that.  They are all dead.

Jane Orient, MD, Your Doctor Is Not In: Healthy Skepticism About National Healthcare, Crown Publishers, New York, 1994

Doctor Jane Orient, a solo internist in Tucson, Arizona,  has been executive director of the American Association of Physicians and Surgeons since 1989.   

She believes the doctor-patient relationship resides at the heart of the American health system. She argues government interference,  health insurance,  and a national health system basically alters and destroys  that relationship.    She believes in free market medicine.

Outside management, even with the best of intentions,  harms the relationship and distracts from what happens inside.   Events within that  inner space, the doctor's office, transcend events in the outer space among those who would manipulate or re-engineer  what transpires privately and confidentially inside.

Many elites, experts, and executives in our society view Doctor Orient’s concept of the doctor-patient relationship as quaint,  dated,  and conservative to a fault.   These people  are generally those outside the patient-doctor relationship who seek to manage it and conform it to the way they think it ought to be as they see it from the top-down.

These experts include government policy wonks,   health insurance leaders ,   pharmaceutical companies,  hospital managers and myriad others who make up the medical-industrial complex.  

Those in this vast and sprawling medical-industrial  complex, which  now consumes $2.7 trillion of our GDP each year,  argue  that we need a national health policy to mold these forces into a coherent, cohesive whole.  

Outside  experts  believe they must  manage what goes on inside to make health care  more effective, efficient, and progressive, even if they have never been inside a doctor’s office.

This  collective outside mindset on what should happen inside has distorted and inflated how much we spend on health care.

Here  are some figures that come off the top of my head.   

In the U.S., we spend 80% of the $2.7 trillion on hospitals (20%), the health insurance industry (20%),  medical diagnostic and therapeutic equipment, devices,   imaging, and medications (20 %);  and 20 % on government regulations, managerial, and bureaucratic demands.  That leaves 20% for paying doctors, of which 6% goes to primary care physicians and 14% to specialists. 

 If I may use the jargon of management,  doctors are in lower quintile. 
These figures are rough estimates.   My point is we spend 80% of our money  outside of paying physicians and 20% inside.    Administrators are kings of the road, doctors are on the road to serfdom.

So much for the paranoia that doctors are scapegoats of a bloated bureaucracy.  

However you look at it, the present system  represents managerial and regulatory overkill. The outside medical system dwarfs the inside medical system.

How much money would we save if we simply gave patients  medical and/or  health savings accounts,  provided them with catastrophic insurance above a certain limit, say $6000, told them exactly what things costs,   let them judge for themselves who and where the best doctors and hospitals were,  and had them shop and pay directly to independent private physicians and hospitals, wherever those providers were nationally, and encouraged them to keep what was left over for retirement and other uses.

And what if we provided them with carefully researched lists indicating where the top doctors were and where they practiced.   And what if these doctors and the institutions with which they were affiliated competed on the basis of price and quality?

No one knows.  Competition on the basis of competiton and quality has never been tried.   Quasi-competition  now exists on the basis of  regional and national reputation, on the basis of market dominance, and on the basis of proximity to where one lives.   But not on the basis of relative costs and relative outcomes (God forbid)  and patient judgment of what they consider to be the best.

But times  they are a’changin'.     

Websites like  are grading doctors on the basis of patient satisfaction. Companies like Castle Connolly Medical Ltd, are publishing lists of top doctors as judged by their peers and by   their clinical, academic,  litigation backgrounds.    

And to save costs and to attract consumers who want personal physicians and costs lower than those offered by private plans and ObamaCare-certified plans,  doctors and ambulatory diagnostic and surgical centers, are going outside hospitals and around government and insurers to pay directly for care in direct pay independent practices without the hassles, delays, and extra expenses inherent in 3rd party dominated markets.   In other words,the free market  and competition is at work, and its aim to lower costs, expand choice, and  empower patients to once again choose what they judge to be the best quality.

Tweet:   Direct  free market health care is growing,  to empower patients, create competition, lower costs,  speed access,  by cutting  out the middlemen.

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