The good old days of bartering are long gone. You used to be able to trade a couple chickens for a newspaper subscription (as shown above), and you knew what you were going to get. You could examine those birds and read an article before deciding to take the deal or not. But this does not translate to medical care. Say you broke your ankle and came to my emergency department. I'm bartering some morphine which took me a couple hours in the poppy fields to harvest. But because you're in excruciating pain, I could name any price. Is this just supply-demand economics? Perhaps, but there seems to be an ethical quandary here. Doctors (hopefully) go into medicine to relieve suffering, not profit over it. I'm not sure how much to charge for that morphine, but I'd feel morally reprehensible to take advantage of your duress.
Health care economics gets messier with the addition of the middleman. Like car accidents, lawsuits, and natural disasters, disease could strike at any time. And the cost of an unexpected diagnosis like cancer can be staggering (as detailed by the Time article). So society has decided to pool our resources to mitigate the effects of catastrophes. We (or our employers) have decided to pay a health care insurer to transfer the risk of a contingent, uncertain loss (that is, health care expenses). Here's the problem: we think we've bought everything. We think by obtaining health care, we have guaranteed ourselves every last bit of modern medicine. Though I fully agree with the new health care law's prohibition of annual and lifetime coverage caps, I think this worsens our illusion.
An astounding amount of health care expenses happen at the very end of life. Say a loved one had a terminal illness. She is admitted to the intensive care unit and the doctors say she will die in 1 week. But if they start hemodialysis, prescribe chemotherapy, perform surgery, check daily MRI scans, and hire a hypoallergenic puppy to stay with her, she may live an additional 3 days. If the bill goes to you, you'd say, "No way, I love her but the extra hundred thousand dollars for 3 days is simply not worth it." But if it is charged to the insurance company? "Hey, we'll take it. We'll take it all. And I want to keep the puppy at the end too." Sure, the insurance companies will fight it (or go bankrupt), but then they become the evilmongers who killed your grandmother by refusing treatment.
The problem is simply this: the cost of health care is too high to pay out of pocket so we turn to insurance companies. But insurance companies distance us from supply-demand cost-analysis decision making. Since the money is not coming out of our paycheck and we feel entitled to everything since we bought into health care, we demand everything. The cost of care skyrockets.
Image is in the public domain, from Wikipedia.
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2 comments:
I appreciate you publishing your thoughts after my comment, Craig! I'm considering a major career change from finance into medicine (in the process of applying now) and I'm trying to better understand the system I'd ultimately be a part of. It's very complex and as someone from the outside looking in, it's helpful to hear your thoughts. Given my background, I think I'll have a better understanding of the economics of the system and when I'm in a decision making role. I'm not sure if that will help our hurt! All the best for now.
Good luck with applying into medicine. It is a thoroughly satisfying profession despite the long process it entails. I think you'd bring a really fascinating perspective and have a unique set of skills and tools to try to address this looming problem of health care finances that doctors and policymakers are struggling to fix.
-Craig
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