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Personally, I find that the most objectionable feature of the conservative attitude is its propensity to reject well-substantiated new knowledge because it dislikes some of the consequences which seem to follow from it – or, to put it bluntly, its obscurantism. I will not deny that scientists as much as others are given to fads and fashions and that we have much reason to be cautious in accepting the conclusions that they draw from their latest theories. But the reasons for our reluctance must themselves be rational and must be kept separate from our regret that the new theories upset our cherished beliefs.

Fredrick Hayek

To follow-up on my previous post, we seem to find ourselves in a position where the overwhelming evidence is that we do not live in the country with the best health care in the world, only the most expensive (with a thanks to Barbara Starfield, who passed away this week, for steadfastly pointing this out). The previous point I was trying to make was that there is a role for regulation in various aspects of our life and health care seems to be one of them. Poorly regulated health care delivery has led to excess capacity in the cities, diminished capacity in rural and underserved areas, and care that is excessive and expensive overall. It has also led to poor general health (see We’re #37 for an in-depth analysis). It was reading comments from another health care blog that reminded me of another potential cause of poor care delivery that regulation must change.

The Dartmouth Atlas Study has looked at variations in health care for over 20 years. The study began, very simply, because investigators began asking “Why are certain rates of surgery so much higher in one place than in another (geographically proximate) place even though human beings don’t vary that much?”  What they have found are some dirty little secrets about our care system:

Regarding the supply of care

Simply put, in regions where there are more hospital beds per capita, patients will be more likely to be admitted to the hospital. In regions where there are more intensive care unit beds, more patients will be cared for in the ICU. More specialists will result in more visits to specialists. And the more CT scanners are available, the more CT scans patients will receive.

In regions where there are relatively fewer medical resources, patients get less care; however, there is no evidence that these patients are worse off than their counterparts in high-resourced, high-spending regions. Patients do not experience improved survival or better quality of life if they live in regions with more care. In fact, the care they receive appears to be worse.

Regarding physicians role in the demand for care

We see dramatic variations in rates of surgical treatment for other conditions where multiple treatment options are possible, such as chronic angina (coronary bypass or angioplasty), low back pain (disc surgery or spinal fusion), arthritis of the knee or hip (joint replacement), and early stage cancer of the prostate (prostatectomy). Such extreme variation arises because patients commonly delegate decision-making to physicians, under the assumption that doctors can accurately understand patients’ values and recommend the correct treatment for them. Yet studies show that when patients are fully informed about their options, they often choose very differently from their physicians.

Regarding the type pf doctor we train

Increasing the number of physicians will make our health care system worse, not better. First, unfettered growth is likely to exacerbate regional inequities in supply and spending; our research has shown that physicians generally do not choose to practice where the need is greatest. Second, expansion of graduate medical education would most likely further undermine primary care and reinforce trends toward a fragmented, specialist-oriented health care system. Current reimbursement systems strongly favor procedure-oriented specialties, and training programs would almost certainly respond to these incentives. Third, workforce expansion will be expensive. If outcomes and patients’ perception of access improved as supply increased, then we could debate whether an expansion of training offers better value than investments in preventive care, disease management, or broader insurance coverage, which have known benefits. Instead, the costs of expansion will limit the resources available for necessary reform efforts without any evidence-based promise of a benefit.

In short, the evidence is clear. The bastardization of the market has brought us not only poorly organized and distributed care, but extreme excesses of useless care. I am willing to pay for my share of necessary medical care to ensure that if I incur an illness others will pay for me. I am also willing to support a public system that rewards physicians for delivering care of proven high quality. I am increasingly unwilling to support a system that rewards excesses in the manner that ours does. If we must maintain specialists pay at current levels, let’s stop training the excess and pay the current ones not to deliver excessive care like we did for tobacco growers not so long ago. At least then we will have healthier Americans.

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Third only to Adam Smith and Ayn Rand in the writers that comprise the “cannon” of the “free market fixes all” believers is Fred Hayek. I was given “The Road to Serfdom” by a former employee who left to enter the free market and make bags of money. He had the zeal of the converted but unfortunately not the drive to succeed. I had to laugh when reading the local paper and there was Hayek quoted by a University of Alabama history professor to explain how things were better in Tuscaloosa (because of all of the capitalist tendencies in T-town) then they were after the hurricane in New Orleans (didn’t realize there was 8 feet of water in Tuscaloosa after the tornado but shows how biased the liberal media is).

Turns out that Hayek might have liked the Affordable Care Act better than the Ryan plan. According to Matthew Yglesias, Hayek’s view was that in regards to health care, the unencumbered market might not deliver care best:

Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance, where, in short, we deal with genuinely insurable risks, the case for the state helping to organise a comprehensive system of social insurance is very strong.

Paul Ryan’s “market-based” Medicare reform has not received the scrutiny it deserves. Many who are followers of the “canon” have touted the need for such reforms. While there is general agreement on the need for change, until now there has been little effective writing available to informed consumers demonstrating that a regulated market in health care is a necessity. A very effective essay was posted recently on the Economist site by M.S. that makes such a case. Worth reading in its entirety, the market analogy comparing the market for shoes to the market for healthcare is especially useful:

we all agree that the private sector produces far better shoes at far lower cost than could be produced by a state-owned manufacturer. I think the analogy is also helpful when we add in the dimension of marketing. Beyond a certain point, you can’t explain the value of a great pair of shoes in any rational fashion. The reason a pair of Air Jordans was vastly superior to a pair of nondescript Soviet sneakers in 1989 was only partly that they were more durable, or had better support and traction. Most of the added value wasn’t there. It was in the interplay of marketing and fashion. The satisfaction customers derive from marketing and fashion is absolutely real; in the case of shoes, it’s practically the whole point. But in the case of medicine, it usually shouldn’t have any place in decisionmaking. We shouldn’t be aiming to make Americans happy by marketing medically useless knee surgery to them and then letting them walk down the street feeling all fine and dandy with snazzy new knees that aren’t actually any better than the old ones. Not in the publically insured sector, anyway. Medically unnecessary cosmetic surgery is fine, but not on the taxpayer’s dime.

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