Tuesday, June 18, 2013

"The fundamental problem with state and employer-based programs"..[in regared to health care]

The title comes from the following paragraph written by Nobel prize winning economist Vernon Smith in his 2008 book entitled "Rationality in Economics" which is  found on page 96:

"The fundamental problem with state and employment-based programs to solve the problem of extending medical care to all risk classes is as follows:

A (the physician,hospital,or other medical service supplier) recommends to B (the patient) what he or she should buy from A and C  (the insurance company or government) reimburses A for the services. This is an incentive nightmare and it explains why the price of medical services persistently rises faster than almost all other economic products and services...

Smith then comments that educational services are analogous and continues "These are examples in which consumer sovereignty is compromised by lack of direct experience and knowledge, and the supplier who harbors an inherent conflict of interest, is considered best capable of deciding what the consumer should buy."

If Smith analysis is on target what can we expect from the massive crony capitalism health care bill Obamacare? Many more folks will be eligible for Medicaid (depending on what various states do) and will get health care paid for by government money also known as someone else's money and possibly more will be covered by employers health insurance which is typically spent by employees in the belief that they are spending someone else's money. So the incentive nightmare of Smith's ABCs will be made even worse.

Friday, June 07, 2013

The U.S. medical care boondoggle depends on hookwinking the physicians

The terms hoodwink and boondoggle are so appropriate. My comments here were inspired in large measure by Dr Michel Accad's Jan 2009 insightful  blog entry from which I quote:

'... beyond ignoring the obvious tension between the individual and the group,hoodwinking physicians into practicing "population medicine" is of course the essential  means to confuse practitioners into thoughtlessly carrying out sweeping intervention whose primary benefit is the profit of third parties."
 to this I add the profit-not necessarily in monetary terms-of the academics whose writings give a scholarly veneer to this monumental hoodwinking enterprise.

See here for Dr. Accad's entire essay,

In this regard several terms and concepts are important:  population medicine, physicians as stewards of finite resources,cost  effectiveness research and  high value care. The key idea is to establish the notion that medical resources is a collectively owned resource and all are entitled to it by virtue of their existence. From this follows that the  utility of the aggregate matters and not that of the individual and that  some one has to manage this collectively owned resource and the elite medical progressives are the self nominated candidates for that job.

The medical  progressive's claim  to being egalitarian advocates of social justice is contradicted by their advocacy for a utilitarian approach to the allocation of these finite resources. Utilitarianism is not a subset of egalitarianism.A leading egalitarian, John Rawls accurately characterizes utilitarianism as being inattentive to the separateness of individuals and treating people merely as means for the achievement of some aggregate or social end. The medical progressives claim to promote social justice in the abstract but operationally sponsor utilitarian calculus in which some individuals may suffer from some alleged statistical benefit to the collective. The progressives play the social justice card frequently in their polemics profiting from this polymorphic term lack of generally agreed upon specificity.

The medical progressives causally dismiss the notion of rationing by their unilateral re-definition  which excludes the limiting of "low value" care from their universe  of rationing. Rationing according to this formulation means only limiting high value care and they assume they will be the highly trained analysts and arbiters of what value is high and what value is low. 

Another linguistic trap is to speak of a given medical expenditure as a "cost to the system" rather than an exchange.  So when someone goes to the ER with chest pain or severe headache that is considered to be a cost to the system or even more ridiculously a drain of resources rather than providing a service for a fee .

 When someone goes to a car repair shop to replace a radiator or visits a barber for a haircut why do we not speak of draining the car care industry's resources or depleting the finite hair care resources?It is because to a large degree we are paying for the medical care with someone else's money It is the third party payers and their academic facilitators that have accomplished a monumental hoodwinking of the public and most of the medical profession by distorting the language of medical care and shifted the emphasis from a long standing  oath based imperative to care for the patient to one of limiting care the effect of which is to benefit the third party payers

 The language of medicine has been transformed into the language of medical collectivism and the third party payers owe a large debt to the efforts of the collectivists in medical academia.

In closing I quote Dr. Accad again with this masterful summary:

" But beyond ignoring the obvious tension between the individual and the group, hoodwinking physicians into practicing “population medicine” is of course the essential means to confuse practitioners into thoughtlessly carrying out sweeping interventions whose primary benefit is the profit of third parties.  Only clever sophistry can claim to reconcile the needs of patients with the profit margin of insurance companies, the bottom line of hospital administrators, the end-of-the-month income of practitioners, the annual reports of employers, the promises of legislators, the zeal of government regulators, the self-importance of academics, the confused intentions of voters, and the pocketbooks of taxpayers.  The term “society” simply conceals the myriad of interest groups that partake in the boondoggle we call the health care system."