Cutting health care costs

Just increase the supply:

In order for any good or service to become cheaper and more widely available, one of two things must occur: 1) the production of the good or service must increase, or 2) the demand for the good or service must decrease. The second of these alternatives is very unlikely to occur in the healthcare industries in the United States over the next couple of decades, simply because the giant Baby Boomer generation is entering the stage of life when the demand for healthcare services tends to be highest.
That leaves us with one, and only one, alternative. In order for healthcare services to become cheaper and more widely available in the United States, the supply of doctors, the supply of hospitals, and the availability of medical supplies and drugs must be increased in order for the price of these goods and services to fall and thus become more widely available to everyone.

Comments

Anonymous
This article has a lot of holes in it.
Anonymous
Problem is, the “supply” costs real money. Supply of doctors need education, which need schools, who need facilities and teachers and teaching hospitals and laboratories.
So yeah, suppy. Supply of money, for one. But unless you go the Automat route, lots more people consuming lots more services means lots more money.
Anonymous
The very important and obvious concept missing from this “analysis”:
Demand Inelasticity
Look it up . . .
Anonymous
Or you end up with the exact opposite. More using the system increasing total costs.
Anonymous
Well, demand for emergency services is no doubt inelastic, but certainly other medical services are elastic: yearly exams, cosmetic surgery, etc. Further, the quality of service (clinics vs. concierge medicine) is certainly elastic. Thus, increasing supply would likely control some costs. Look it up.
Of course, the EASIEST way in increase supply is to do what Milton Friedman advocated: ELIMINATE credentialing requirements. Let anyone practice medicine.
Certainly more people would have access. Quality may be more uneven. On the other hand, quality may improve, as physicians would have to be more open about their quality/ better at signaling their abilities in order to attract patients. It’s an experiment worth trying, given the “crisis” US medicine faces
Anonymous
we already HAVE a situation in which everybody is “practicing” medicine. They’re called chiropracters, naturopaths, homeopaths, herbalists, Reiki healers, acupuncturists, tatto artists and assorted other charlatans. Any one seen any improvement in the overall health of this country?
Anonymous
well, no. chiropracters/ naturpaths/ quack de jour can’t prescribe medicine (at least in any state I know of), can’t perform surgery. Further, they face greater difficulties in insurance reimbursement, etc.
Chiropractors are an interesting example. No one really believes their cr– about adjustments, but they make people FEEL BETTER–in ways the physicians don’t/can’t. It may be in chiro’s patients’ heads, but who cares? How many physicians have used placebo or placebo-like therapies successfully? A lot, I’m sure.
Allowing a free market would allow more people to feel better in different ways. What’s wrong with that? No one profession has all the right answers, and I trust the market to sort things out–more than, say, any self-serving professional organization like the AMA.
Anonymous
Credentialing is in place to protect people. I know it sounds far fetched, but if you don’t know what you are doing, prescribing medicines and doing surgery could actually be dangerous. I’m pretty good slicing a turkey, maybe I could be a surgeon, is your basic rationale. Hell, I like to shoot guns and drive fast. Why do I have to go to training to be a cop.
In addition I’m so sick of hearing about the AMA. Anyone who knows anything about medicine knows that the AMA has nothing to do with the shortage of physicians today. Funding of residency spots were frozen more than a decade ago by the federal government. NOT THE AMA.
Anonymous
We’re a free society. Do we need credentializing to “protect people”?
If there were no legal restrictions on medical practice, most people would still go to MDs. Some wouldn’t–and we would learn (or the market would teach) what tasks, jobs could be performed efficiently without an MD–and which do.
At the same time, you’d increase supply, lower cost, and increase access. It’s a win/win
Anonymous
“chiropracters/ naturpaths/ quack de jour can’t prescribe medicine”
Uhh wrong. Chiros and naturopaths can BOTH script medications.
Furthermore you fail to mention PAs and NPs, both of which can script meds AND do surgeries.
The USA has one of the highest doctor/patient ratios in the world. We dont need more doctors, we need less demand. Socialized medicine will accomplish this via rationing.
Anonymous
Yes we do.
Same reason we don’t let Hasbro sell GI joe with a a free bag of broken glass.
It looks like alot of experimenting with people lives.
Anonymous
>>Chiros and naturopaths can BOTH script medications.
Can’t speak for the chiros, but I know the naturopaths can.
I had a lady who I’d been taking care of, for various aches and pains, “I’m tired” and all that.
Then one day, she ended up in our ER with cardiac arrythmias. A stay in our ICU recealed a TSH of zero.
But I’d done a TSH about a year ago, it was normal. That was part of the “I’m tired” thing.
(we’ll set the divorce and the tobacco and alcohol aside for now, as we entertain the problem at hand)
It turned out, the person had presented to local naturopath, with “I’m tired” complaint. That complaint was met with a “prescription” for the “natural product” of animal-source thyroid, Armour or similar.
Megadose. Boy, she felt better. For a while. Then the chest pain, palpitations, arrhythmias, and ICU stay.
Apparently, the divorce and the alcohol and the cigarettes were not relevant to the naturopath who cares for “the whole patient” as opposed to the physician who is disease-oriented, brought it up in the first place, and was brushed off by the patient.
Patient’s Board complaint went nowhere, as the naturopathic board is not interested in complaints that are related to us evil MD’s, since all we’re interested in, is pushing pills. As opposed to the naturopath pushing her line of natural products driving TSH to zero.
RoseAG
From an economic point of view the idea that increasing supply will reduce costs is right.
But I read those studies that found that Medicare costs are higher in regions with more beds/hospitals. That makes it look like more supply just increases the amount of billings.
More staff with the current payment set-up doesn’t seem like the answer.
It isn’t a simple problem.
Anonymous
OK, boys, settle down. First, by my count, naturopaths can only prescribe in 10 states and 2 Canadian provinces. Big whoops.
Second, I’m sure some naturopaths screw up, but given the number of medicine/dosage mistakes hospitals make (what does the Institute for Medicine say, 1.5 MILLION a year?), you guys don’t have much of a leg to stand on.
And, that’s the point. Once we eliminate credentialing requirements, we can run randomized studies and see whether naturopaths are as bad as doctors, or the other way round. Now, you doctors are just dictating policy by anecdote and self-interest.
Anonymous
What is the point of having this discussion? Everyone involved knows that no significant percentage of Americans is interested in this happening. Re-legalization of unlicensed practice of medicine has never happened anywhere and will never happen. How ’bout we talk about something a little more realistic than Libertarian Paradise?
Anonymous
>.OK, boys, settle down. First, by my count, naturopaths can only prescribe in 10 states and 2 Canadian provinces. Big whoops.
I’m in one of them. I get a lot of requests to “co-manage” or “collaborate” from optometrists, naturopaths, chiropractirs, etc.
What they want is my license. They want me to run labs, take the medicolegal responsibility for the testing, take the economic hit for the testing (overuse of resources), while they skate on any responsibility for their work. Much like my thyroid person.
The patient really did complain. Complaint was ignored by naturopathic board. I’ve seen physicians censured for a lot less.
Anonymous
INcreasing supply of doctors WILL NOT reduce costs because that only works in a free market and healthcare is NOT a free market.
NYC has the highest number of doctors per capita in the world. Surely you’d expect their salaries to be lower than in other large cities of the US, since they are all competiting against each other.
Right?
Wrong.
NYC docs have some of the HIGHEST incomes compared to their other urban counterparts, because doctors dont compete against each other, they just increase the total # of billings by insurance and medicare.
More doctors = more billings.
Anonymous
This supply side case is just ridiculous. It presupposes easy increases in supply (of providers providing) which, as others note cannot happen unless you either spend a whole lot of money training doctors or allow people who are not trained to prescribe. This is a simplistic parlor game based on imaginary worlds and elementary economic theories, neither of which work in the real world market for medical services. There is demand inelasticity (just try even getting a co-payment), and even that is not uniform and there is non-uniform supply elasticity (easier to get more nurse practitioners than internists). There are real barriers to entry, both in need to obtain training and in need to meet government-imposed licensing qualifications and again in need to obtain capital investment (can’t practice on a street corner, need an office with staff and equipment, too.)
The article just illustrates how little its writers actually understand about economics, business, health care, human behavior and everything else that actually influences how medical care is bought and sold.
Anonymous
Even the most saturated domestic market is a poor example when it comes to representing a situation in which competition would exist. One must cross a certain threshold of suppliers for there to be a sufficient number to actually engender competition. When providers become as prevalent as auto mechanics, then we will have a system in which competition would be present.
Anonymous
Yes, but then people would stop entering the profession because why work so hard to be a car mechanic when I could easily go to law school school or get an MBA.
Anonymous
So, should I take everything that preceded the word “but” in agreeing with my statement regarding the fallacious nature of the New York example?
Anonymous
Mike
What a bunch of buttplugs the people advocating less credentialing are. Being a doctor isnt like caring for a car. If the car dies, no one gets blamed for killing anybody or dragged into court. Death/stroke/MI/etc are things here there isnt any second chance. And while much of outpt medical practice isn’t these things, when it happens, I think we would all like our MD’s to be aware of them and capable of dealing with them.
So is the goal to punish MD’s who make a living? I’ve got news for you..it costs like 10 times as much to live in NYC as other palces. So we should make LESS??? Or just get the hell out.
Medicine used to be aprofession where at least you got some respect. Now its like you spent 10 or so years of your life busting your ass for no pay so you can be treated BELOW a mechanic or plumber.
Of course, when someone calls crying “I have to see you right away!” or “I just check my pressure, its high, and I’m lightheaded…”, then suddenly in those moments were useful.
Factor all of that into your god%&$# macroeconomic equations.