Ezra says that consumer-based medicine is a red herring:
Indeed, the reason people get medical care -- in particular expensive medical care -- is because their doctors tell them to. I have never in my life sat up in bed and thought, "huh, I should really get some laparoscopic surgery." If I get a surgery, it's because my doctor told me to. And if I can't afford it, I have to ignore his diagnosis.
For that reason, if you want to safely cut back on care patients buy, you need to get doctors to stop recommending so much wasted care. You can do that in a few ways: Put them on salary rather than on fee-for-service deals, so they don't make more money when they recommend treatment. Create new research institutions that test the cost effectiveness of care so they have a better idea of which treatments are worth recommending. Offer bonuses for using proven therapies. Etc, etc. But this idea that the way to better run medical care is to rejigger the financial incentives so patients have to ignore their doctor's advice is really quite bizarre.
I actually agree with Ezra that consumer-driven medicine is unlikely to be much of a panacea. But I think he's wrong about the way that it reduces costs. Yes, it can save costs by forcing patients to forego useful procedures, but most consumer-driven advocates don't envision patients being uninsured; they just envision high deductibles to make them cost-conscious. More to the point, consumer costs don't just make patients attentive to cost-benefit analysis; they also change the way that doctors think about them. Doctors are much more willing to order tests charged to a faceless insurance company (generally one they've had unpleasant financial negotiations with) than they are to a live patient sitting right there in their office.
During the years that I was uninsured, I saw expensive East Side doctors, and doctors running Medicaid mills for the local housing projects. The common denominator was that as long as they assumed that I was insured, either by an employer or the government, they tended to order a lot of tests and procedures. The magic words "I'm uninsured" revealed that most of those tests had a very, very slim marginal benefit. We still ordered tests that were likely to yield useful information: thyroid function, breathing tests, and various other things that for reasons of age or previous medical history seemed likely to yield useful results. But given that I am not overweight and had none of the symptoms of diabetes, we canned the blood sugar tests. Likewise the EKG for my nonexistant heart symptoms, the assorted tests for incredibly rare autoimmune diseases, the hormone levels, and the cholesterol screen.
Since becoming insured, I've had all those tests, and more. They always come back fine, even my thyroid, which I've been waiting to lose to an autoimmune disease for almost ten years now. Meanwhile, I've had three disease scares from tests that showed borderline positive, five EKGs, three electrocardiograms, two chest x-rays (to be fair, one was at the behest of the WTC workers program), and probably more useless procedures that I can't remember. They haven't made me healthier; they've made doctors more secure, and test companies richer. Those categories of expenditures are ruthlessly trimmed by cost-sharing patients without much apparent cost in health.
There's another category that I'm not sure who is best equipped to deal with: the borderline useful. For example, I've had a camera stuck down my throat in order to discover that I had, not an exciting ulcer or scary stomach cancer, but boring acid reflux. Had I still been uninsured, I probably would have gotten a dose of antibiotics and antacids for the putative ulcer, and orders to come back if the problem didn't go away. Had it actually been stomach cancer, of course, that would have been bad . . . but almost no one at the age of 30 has stomach cancer. And the risks of general anaethesia may outweigh the benefits of finding that one-in-a-million cancer.
It seems obvious that consumer-driven care is the only shot we have at eliminating those kinds of expenditures, which could trim a lot off our health care bills. Either the government, or private insurers, are self-evidently willing to pay for couture medicine in a way that other countries are not. What I don't know is whether we should be interested in eliminating this last category.
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