Parasitic Contagion

http://www.slate.com/id/2227082/

This is an excellent article. It points to the fundamental divergence that the payment methodology creates between the priorities of doctors, patients, and the economy as a whole. The angioplasty example demonstrates this: doctors generally recommend angioplasties for stable chest pain because they are paid much more for that procedure than for counselling the patient to alter his lifestyle, which is just as effective--the doctor increases his income, the patient's outcome is the same, and the economy overpays for the result. This is not defensive medicine, it is offensive medicine.

 

But, I wonder about the implication that more GPs are needed to increase preventive care. Would this really have a significant impact (of course, the angioplasty scenario implies that it does in some cases at least)? And, if what this mainly entails is basic advice on a healthy lifestyle, do we really need $150/hr doctors to be the conduits of this advice? Wouldn't nurses or physician's assistants or even social workers be sufficient, especially if they had the explicit imprimatur of a physician to invoke greater authority?

 

In the end, so long as the cost-benefit trade-off is not accounted for in medical decisions, and technology continues to improve, and no one has sufficient motive to institute rationing, the medical sector's costs will continue to rise, there being no natural limit to its size and scope.

 

600,000 doctors control a sixth of the American economy--that is, 0.2% of the population controls 16% of the economy. Possibly this is a harmful concentration of power, particularly given that their profit corresponds to some degree to how much of the economy they control. Not coincidentally, they pay themselves about 3% of national income--also rather concentrated. Of course, they make almost no effort to restrain medical costs, since there are no incentives for them to do so. Shockingly, this essentially non-market system of exchange has proven to be highly inefficient and flagrantly corrupt--high costs, mostly mediocre outcomes.

A socialist system can only function at all when supported by a capitalist system. But, when the socialist sector grows too large it begins to distort the private sector with excessive tax burdens and unavoidable "economic" interactions with the socialist sector. At some point, the relentless logic of ever-greater socialization cannibalizes the private sector, that is, the private sector begins to shrink in absolute terms. In course of this process, economic growth declines and faith in capitalism follows, due to popular misunderstanding of the causal relations involved. We are now not far from this threshold--perhaps only 10 to 20 years.