THE PURSUIT OF WORLDLINESS
A blog by Barry Edelson



Malpractice

madoff

How the Youngest Science Was Nearly
Destroyed by the Dismal Science

In Lewis Thomas's excellent memoir, "The Youngest Science", he tells the story of medicine's development in the early 20th century and of his own medical training. At the very time when he was finishing medical school in the 1930s, penicillin came into widespread use. Until that time, according to Thomas, of the more than 1,000 prescriptions listed in the American Pharmacopeia, only three had known therapeutic value: aspirin, morphine and digitalis. All the rest were placebos, and every doctor knew it. Antibiotics changed everything. I have not read the book for at least 25 years, but I can still vividly recall the author's description of own astonishment when a pneumonia patient, who would have almost certainly died, got up out of bed and walked out of the hospital after a few days' administration of the first "miracle" drug. Almost overnight, medical practice was transformed from a strictly diagnostic art, in which doctors could do little more than watch nature take its course, into a therapeutic science through which patients could actually be cured. And once doctors were able to cure things, they were able to charge much higher fees for their services. Thomas' own medical training, and the entire edifice on which it was built, became obsolete almost as soon as he was handed his diploma.

Once medicine became a lucrative profession, it gathered all of the excesses and market-warping characteristics that accumulate in any field whose practitioners have a vested interest in preserving their monopoly. Becoming a doctor is very expensive, and being a doctor takes enormous stamina, so doctors can hardly be blamed for seeking a return on their investment of time and money. However, they bear a large share of the responsibility for the ever-escalating cost of health care. In a typical working day, a doctor has so many patients to see that he or she barely has time to sit down. And why are doctors so busy that they are generally unable to provide the kind of personalized attention one would expect from such an expensive service? Because there appear to be more sick people than there are doctors to treat them. And why are there not enough doctors? Because the practice of medicine does not constitute a marketplace in which supply strives to meet demand, but a cartel of its own devising, in which the number of places in medical schools is rationed by those already in possession of their degrees, in order to ensure that a flood of new doctors doesn't drive down the profits (i.e., fees and salaries) of the profession's members overall. As every first-year student of economics knows, shortages lead to higher prices, whether they are naturally occurring or artificially induced.

While medical lore is replete with reassuring stories about people who went to see the doctor for some little thing or other and were found by sheer coincidence to have a fatal disease which would have otherwise gone unnoticed, and whose lives were therefore saved by the heroic doctor's observant eye, it is impossible to know how many serious ailments are in fact not found because the doctor either wasn't consulted for lack of access or money, was looking for something else, or was too overworked to spend the time necessary to go beyond the symptoms presented. An abundance of errors, even forgivable ones that owe more to the inherent nature of a patients' illness than to the doctor's negligence, have driven premiums for malpractice insurance to astronomical levels, which, in turn, drives up the cost of care across the board. Add to that pharmaceutical and medical equipment industries that continually patent more costly diagnostic tools and treatments, and you have a recipe guaranteed to defy any attempt at controlling costs.

There you have two of the hyper-extremes of health care: when you need it, it may not be available to you, and when it is available, it is likely to be so expensive that you cannot afford to pay for it. Hence the entry of insurance companies and their misbegotten offspring, the HMOs. The former originally filled the traditional role of insurance coverage: a premium is paid against the potential for risk, which is calculated by actuarial methods to take into account the likelihood of medical care being needed by the overall population of covered individuals, and how much such care will cost. Statistically, nearly everyone needs medical care at some point or another in their lives, so the cost of this insurance is therefore disproportionately high. The HMOs came on the scene ostensibly as a means of controlling costs, but what they have effectively done is merely add another cartel on top of the one already created and enforced by doctors. Though they operate under the guise of a free market, they are really socialism at its worst, offering the deprivations of central planning and the hard-heartedness of dictatorial rule. The HMO business model is no more than a second medical rationing scheme, in which patients are directed to the medical care the HMO deems reasonable (read: affordable) whether or not it is the care that is actually needed. Just as in restricting the number of medical licenses issued, rationing of care creates an artificial shortage which, ironically, leads to even higher prices, in this case not through the emergence of a black market but through a theoretically open market that is in fact so distorted by multiple layers of private interests and government intervention that there is no effective control over prices or, for that matter, the quality and equal distribution of care, or any other part of the health services industrial complex.

While enriching their own executives and stockholders, principally by denying medical services to their customers, the HMOs were only too happy to be pushers for politicians who grew dependent on their campaign contributions to keep them in office. There's plenty of gullibility to go around, but conservatives in particular, who exhibit a Pavlovian response to the words "free market", were suckers for the initial appeal of the HMOs, which claimed to be introducing market discipline into a poorly regulated business. That people have grown sick and died as a result of this system — many, many people — has so far not been sufficient to move the federal government to change it. Even now, with the economy in desperate shape and millions more people at risk of losing their medical coverage, and with corporations anxious to shed the burden of providing medical benefits for their employees, and with an incoming administration that surely has the strongest mandate yet to apply a major fix to the national disgrace that is our health care system, there are so many forces arrayed against every aspect of any imaginable set of solutions that reform is by no means a sure thing.



HMOs promised market
discipline, but instead
delivered bad socialism


Perhaps with the implosion of the financial markets, the astonishing disappearance of some of the world's most venerable investment companies and the effective if reluctant nationalization of many of these institutions, there will be less appeal this time around to the argument that "we don't want no Washington bureaucrats" running the health care system. Could the government really do worse than the "marketplace" has done? Have we not reached the moment when the free market in medicine, like the one in the financial and banking industries, can be deemed a failure in its present form?

If the free market chorus should continue to make a nuisance of itself as the Congress and the White House begin again to contemplate health care reform, we can easily call that bluff. Okay, let's try a real market solution. If we truly want to reduce the cost of health care, there is no reason why the economic arguments used to describe and defend other markets ought not to apply. First, let's increase the supply of medical services relative to demand (i.e., educate more doctors, build more hospitals), in order to increase competition and drive down prices. Second, allow people to "shop" in the open marketplace (i.e., do not allow the HMOs to tell people which doctors they can see or which services they can buy, which would effectively put them out of business), thereby ending the rationing of care and allowing the market to find the "correct" price for medical services.

This would never work, of course, even if the political will could be found to overcome the objections of lobbyists. Medical care is different from other commodities because people don't "choose" to seek it in the normal sense. Doctors were long able to charge what they wanted because no patient in need of help is going to refuse it. The HMOs were supposed to drive down costs, but its rationing methodology has only an indirect impact on the providers of care, who must cope not only with insurance companies but also with the government's programs for the poor and elderly (Medicaid and Medicare) as well as their crippling premiums for malpractice insurance. It might well be argued that the surest way to reduce costs is to subsidize the cost of medical education and to make all doctors government employees, as is the case in almost every other developed country. This would eliminate the debt piled up by many young doctors coming out of medical school and the equally debilitating cost of protecting against lawsuits. There would instantly be less upward pressure on doctors to secure higher fees and salaries. If this were to happen, some of those headed for a career in medicine might indeed decide that there is no longer enough money in it for them. But the promise of an upper-middle class lifestyle, without the burden of debt or malpractice premiums, has been incentive enough for doctors in every Western European country where this has been accomplished.

The history of medicine in the seven decades since Lewis Thomas went to medical school is one of an increasingly complex development of drugs, surgical procedures and other treatments, accompanied by an ever-growing struggle to pay for it all. Our failure to provide adequate medical care for all citizens in the midst of the greatest advancement in medical knowledge that the world has known is quite simply unforgivable. One can only hope that a new-found awakening to the dangers of unfettered capitalism will give rise to an equivalent acknowledgment that medicine is too important to be left to the mercy of market forces, and that access to free health care is no less a right than access to free public education or a free legal defense. It is long past time we remembered that almost every hospital built in this country in the 19th and 20th centuries was funded by not-for-profit organizations and religious denominations, and for the sole purpose of treating the sick. The hostile takeover of health care by corporations, and their accomplices in government, has reduced our glorious medical science to a cash cow that benefits only those who have been fortunate enough to grab a slice of the pie for themselves. It is long past time we realized that the ability to pay is an immoral basis on which to decide who lives and who dies.

January 5, 2009




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