Coyote Blog

We all know the problem with oil companies:  They restrict supply to drive up prices to earn profit margins that are nearly a third of those earned by Microsoft while simultaneously keeping prices too low and promoting addiction to oil which produces a lot of CO2 and they never want to reinvest their profits in exploring for new oil so the government needs to restrict drilling in every major prospective US region so the oil companies will be stopped from greedily drilling everywhere and destroying the environment.

Barack Obama seems to be bringing this damned-if-you-do-damned-if-you-don’t criticism to the medical industry, and particularly doctors.

On the one hand, he told doctors at the AMA convention yesterday that he was not a fan of tort reform and felt that limits on malpractice cases was a disservice to those who were truly injured.

On the other hand he made this case:

Not long ago, doctors’ decisions were rarely questioned. Now they are being blamed for a big part of the wasteful spending in the nation’s $2.5 trillion health care system. Studies have shown that as much as 30 cents of the U.S. health care dollar may be going for tests and procedures that are of little or no value to patients.

The Obama administration has cited such findings as evidence that the system is broken. Since doctors are the ones responsible for ordering tests and procedures, health care costs cannot be brought under control unless they change their decision-making habits.

On the third hand, doctors aren’t spending enough to address preventable errors:

President Obama himself in his speech cited the “100,000 deaths a year” figure as if it’s reliable and well established, as did yesterday’s New York Times. And of course it’s a figure eagerly spread by the Litigation Lobby. But as Zachary F. Meisel and Jesse M. Pines note in Slate, it’s a really, really, really soft number:

…one of the biggest headlines of all was the 1999 Institute of Medicine report To Err Is Human, which announced that up to 98,000 preventable deaths occur each year in U.S. hospitals. Since then, health care improvement organizations such as Leapfrog Group have invested copious resources in reducing preventable errors. But a key issue has been overlooked in this movement: The original estimate — the 98,000 deaths — may have been way off. In fact, some of the researchers who conducted the original studies used in the IOM report re-evaluated their data in 2002 and reported that had they used a different calculation method, the number of estimated deaths would have been less than 10 percent of the original. Oops.

I have written a zillion times that government licensing programs tend to be incumbent protection from competition for the licensees, rather than any real benefit to consumers.  This is particularly true in health care.

Why does a person need to go to school and residency for a decade to put three stitches in a kid’s cut?  Why do I have to go to a full dentist’s office to get my teeth cleaned?  Why does someone have to go to school for years to tell me my contact lens strength needs to be incremented by another 0.5, when I already knew that and could have just ordered them myself?  The reason is licensing, and it both increases prices by limiting the number of providers and by forcing me to see someone who is often wildly overqualified to handle my problem.

My sense is that this over-licensing for routine functions in medicine is the second largest contributor to costs (the first is the elimination of price-shopping by  making the payor for the services different from the person who receives the services).  But don’t expect the government, long in thrall to the AMA, to do anything about this in any health care “reform”:

bills and amendments died during the Texas legislative session that would have allowed advanced practice nurses to diagnose and to prescribe for common, minor illness and injures without doctor supervision.

You can blame Texas doctors.

Despite better protections from malpractice lawsuits and lower malpractice premiums, Texas has a doctor shortage. Nevertheless, the Texas Medical Association took every step to ensure physicians will have a tight rein on the activities of well-trained nurses.

The barrier against nurses will continue to keep low-fee retail health clinics, such as those operated by Walgreen and CVS drug store chains, from expanding in Texas. The state law requiring doctor supervision adds too much cost to the clinics.

Texas has only about 85 of the 1,200 retail health clinics in the nation. San Antonio does not have a single one. The clinics are popular wherever they exist because nurse practitioners can treat common ailments and minor injuries with little waiting time and fees that average about $60, much less than emergency rooms. The clinics operate evenings and weekends and accept insurance plans.

The clinics would represent real health care reform, especially in Texas. Most of the state, 179 counties out of 254, is classified as medically underserved. Among them are 45 metropolitan counties, including Bexar.  (hat tip:  Carpe Diem)

Postscript: But Coyote, how can you possibly be against licensing of doctors?  You wouldn’t want just anyone doing open heart surgery on you, would you?

No, I wouldn’t, but while AMA licensing is overkill for putting in stitches, it falls short of what I would want for heart surgery, or oncology, or major plastic surgery.  I would not just accept any licensed doctor to do these things – I would do research and get referrals.  I would enforce a higher standard.  And this is why broad licensing is so un-helpful.  It is overkill for certain procedures, but falls short for others.  I guess their may be a Goldilocks application for current licensing (maybe for my GP?) but that is almost an accident.

I don’t oppose third party certifications per se.  I think that in a free society, many groups, such as the AMA (or consumers reports, or the UL, or whoever) could act as certification or review bodies for different medical practices.  And I would very likely as a consumer find such an organization I trust and insist the providers I used for certain procedures be minimally approved by this group.