Economics Questions

Re: Money-Driven Medicine

MacFall — Sun, 02 Nov 2008 03:56:18 GMT

Jaq Phule:

Pfff. That part should be easy. All you have to do is to produce a New Socialist Doctor who values the needs of the many over his abilities. Isn't that OBVIOUS to everyone on this forum?

Your username certainly is apt for one who would make such a statement.

(Noting, of course, that you were being sarcastic.)

Re: Money-Driven Medicine

alansmithee — Sat, 01 Nov 2008 23:14:03 GMT

"Rather than sharing knowledge, drugmakers and device makers divide value."

I can't even work out what this is meant to mean...

"we must once again empower doctors . . . to practice patient-centered medicine--based not on corporate imperatives, doctors' druthers, or even patients' demands,"

What a corker...patient centered medicine that goes against 'even patients' demands'.

"In fact, Mahar demonstrates, when it comes to medicine, the traditional laws of supply and demand do not apply. Normally, when supply expands, prices fall. But in the health care industry, as the number and variety of drugs, devices, and treatments multiplies, demand rises to absorb the excess, and prices climb."

If this is even true then would it not simply be an example of cum hoc ergo propter hoc (with this therefore because of this - namely, supply increases and prices rise, therefore capitalism doesnt work in healthcare)? I'm not even convinced on a cursory glance that this is even true: "demand rises to absorb the excess". Again what would this even mean? What excess? And why would demand increase simply because of it? This is so confusing if you try and unpack it, indicating to me that it was never intended to be unpacked And surely prices would only rise if the demand created (solely to absorb this excess as confusing as that is) outsripped the supply increase?

Safe to say I think that this lady is an example of what would have deemed 'a second-hand dealer in ideas' (in the derogatory sense).

Re: Money-Driven Medicine

Rubén — Sat, 01 Nov 2008 23:03:48 GMT

Thank you Jon for sharing this synopsis.

This kind of situation enables socialists to argue for their vision of medicine, whose shortcomings are also numerous, the most obvious of which are: Understaffed hospitals, not enough medicines, not enough beds, sometimes you have to wait a year for an appointment (unless you are already dead by then), obsolete treatments, long lines to get into the emergency room, filthy facilities, etc.

So it would be interesting to see what would be a third approach to medicine, considering that none of the previous two passes the test of what should be possible in medicine, given the current level of human, scientific and economic development.

Re: Money-Driven Medicine

Jaq Phule — Sat, 01 Nov 2008 21:40:53 GMT

Pfff. That part should be easy. All you have to do is to produce a New Socialist Doctor who values the needs of the many over his abilities. Isn't that OBVIOUS to everyone on this forum?

Re: Money-Driven Medicine

hayekianxyz — Sat, 01 Nov 2008 00:52:16 GMT

I'm curious, how exactly is it that they plan on empowering doctors? Forcing them to work for the state?

What drivel.

Money-Driven Medicine

Jon Irenicus — Sat, 01 Nov 2008 00:33:39 GMT

So I was looking for a book today, and I came across this:

Money-Driven Medicine.

Synopsis: Why is medical care in the United States so expensive? For decades, Americans have taken it as a matter of faith that we spend more because we have the best health care system in the world. But as costs levitate, that argument becomes more difficult to make. Today, we spend twice as much as Japan on health care -- yet few would argue that our health care system is twice as good. Instead, startling new evidence suggests that one out of every three of our health care dollars is squandered on unnecessary or redundant tests; unproven, sometimes unwanted procedures; and overpriced drugs and devices that, too often, are no better than the less expensive products they have replaced. How did this happen? In Money-Driven Medicine, Maggie Mahar takes the reader behind the scenes of a $2 trillion industry to witness how billions of dollars are wasted in a Hobbesian marketplace that pits the industry's players against each other. In remarkably candid interviews, doctors, hospital administrators, patients, health care economists, corporate executives, and Wall Street analysts describe a war of "all against all" that can turn physicians, hospitals, insurers, drugmakers, and device makers into blood rivals. Rather than collaborating, doctors and hospitals compete. Rather than sharing knowledge, drugmakers and device makers divide value. Rather than thinking about long-term collective goals, the imperatives of an impatient marketplace force health care providers to focus on short-term fiscal imperatives. And so investments in untested bleeding-edge medical technologies crowd out investments in information technology that might, in the long run, not only reduce errors but contain costs. In theory, free market competition should tame health care inflation. In fact, Mahar demonstrates, when it comes to medicine, the traditional laws of supply and demand do not apply. Normally, when supply expands, prices fall. But in the health care industry, as the number and variety of drugs, devices, and treatments multiplies, demand rises to absorb the excess, and prices climb. Meanwhile, the perverse incentives of a fee-for-service system reward health care providers for doing more, not less. In this superbly written book, Mahar shows why doctors must take responsibility for the future of our health care industry. Today, she observes, "physicians have been stripped of their standing as professionals: Insurers address them as vendors (‘Dear Health Care Provider'), drugmakers and device makers see them as customers (someone you might take to lunch or a strip club), while . . . consumers (aka patients) are encouraged to see their doctors as overpaid retailers. . . . Before patients can reclaim their rightful place as the center--and indeed as the raison d'être--of our health care system," Mahar suggests, "we must once again empower doctors . . . to practice patient-centered medicine--based not on corporate imperatives, doctors' druthers, or even patients' demands," but on the best scientific research available.

Yeah, she should win a Nobel prize for "proving" the laws of demand and supply don't work here.

-Jon