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Wednesday, August 29, 2007

Alex Tabarrok: Krugman on Socialized Medicine

Alex Tabarrok brings up the health care waiting time issue once again:

Krugman on socialized medicine, by Alex Tabarrok:

Systems of actual socialized medicine, like Britain's, are actually very good at saying no: there's a limited budget, and the medical professionals who run the system set priorities. That's the reason British health care delivers results better than ours, at only 40 percent the cost — there are long waits for elective surgery, but that's because doctors think that it's not a high priority...

Krugman gets points for a mostly honest description but he is a lousy salesman. Is there any doubt that most people reading this will say "no way, not in America."?

If we look at just one statistic rather than comparing the systems overall, then we can get a distorted picture. Suppose you are in Britain, Canada, France. etc. and you are debating whether to adopt a market-driven system. Though the U.S. is far from a pure market-driven system,  something often overlooked in these discussions, when you do look at the U.S. and find out that waiting times for cosmetic surgery are longer shorter than for medically necessary care, is that the kind of market-driven priorities you want in the system?:

"Shorter Waits for Botox Than Examinations of Moles, by Natasha Singer, NY Times: Patients seeking an appointment with a dermatologist to ask about a potentially cancerous mole have to wait substantially longer than those seeking Botox for wrinkles, says a study published online today by The Journal of the American Academy of Dermatology. ...

“The difference in wait times between medical dermatology and cosmetic dermatology patients is clearly real,” said Dr. Jack S. Resneck Jr., the lead author of the study... In Boston, the median Botox wait was 13 days, versus 68 days for a mole examination. ...

Dr. David M. Pariser, president-elect of the American Academy of Dermatology, said it seemed clear that cosmetic patients in the studied cities had faster access to dermatologists than medical patients. “It doesn’t make me proud to say it, but it is true,” Dr. Pariser, a dermatologist in Norfolk, Va., said. ...

Other dermatologists said financial incentives to perform cosmetic treatments coupled with bureaucratic obstacles in obtaining insurance reimbursement for medical treatments might also have a role in the varying wait times.

Dr. Michael J. Franzblau, a dermatologist in San Francisco, said doctors typically charged $400 to $600 for a Botox antiwrinkle treatment, for which patients pay upfront because insurance does not cover it.

Meanwhile, doctors have to wait for health insurance to reimburse them for mole examinations, for which they receive an average of $50 to $75, Dr. Franzblau said. ...

If cosmetic surgery is more profitable than medically necessary interventions, that is what an unregulated market will provide.

When we calculate wait times, we don't count all the people without health insurance who forego care because they cannot afford it. Adding in an infinite wait time for these people -- that's how long they will have to wait, forever -- will change the wait time figures substantially.

Alex seems to be suggesting that in a market-system nobody ever has to wait, and that everybody will have access to all the care that they need. But in a pure market-system, if you cannot afford a procedure, then no matter how necessary the procedure is, it is unavailable. It's rationing by price, but it's still rationing and some will be excluded from receiving the care they need. To save money, we will have to say no to someone, somehow, the only question is who. What is the most equitable way to say no?

It's not all that hard to find places where one system or the other does better, or to manipulate a particular statistic in one system's favor, but that doesn't tell us much about the overall comparison. The big point is that while spending less than half of what we spend (around 41% of our spending in Britain), other countries are able to achieve outcomes that are, overall, as good or better than ours. If we want to make different choices than Britain and use that extra 59% to reduce wait times for elective surgery, or to improve other areas of health care delivery, there's no reason we can't choose to do so. There's a lot we could do with the amount of additional resources that would be freed up by adopting the best features of British, French, Canadian, etc. systems.

Update: In comments, Alex responds and says I miscast the thrust of his post:

"Alex seems to be suggesting that in a market-system nobody ever has to wait, and that everybody will have access to all the care that they need."

What?????  I've heard of reading between the lines but this is a bit much. 

I think the straighforward reading of my post is clear but here it is again.  Telling Americans that under socialized medicine "medical professionals" "run the system" "set priorities" and "are very good at saying no" is not a good way to sell socialized medicine.

Do you disagree?

There are different ways to ration care, one is the price system which will exclude some people from some services, another is to set priorities (something that has been implemented in my state - and yes, medical professionals were involved in setting the priorities (list), that was a selling point...).

In answer to the question, no, I don't think it would sell the plan better to say the priorities were set by non-medical professionals.

Update: A few more words about this in direct answer to Alex's question. My recollection of the implementation of the list of covered services as it played out here is that it was a highly political and controversial process with all the expected objections from all the expected sources. The list of covered medical services, and what would and would not end up on it was a key focal point of opponents. Having medical professionals make the choices - which were required to take cost effectiveness and other characteristics into account - made a big difference in the political debate and allowed the process to go forward. There have been quite a few changes since the inception of the plan, and I'm not sure of its current status (it remains very political), but it is clear that having medical professionals involved in the choices helped to overcome objections to the plan.

    Posted by on Wednesday, August 29, 2007 at 11:25 AM in Economics, Health Care, Policy | Permalink  TrackBack (0)  Comments (33)


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