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  • The Public-Health Fallacy

    Posted by Jonathan on November 22nd, 2009 (All posts by )

    The discussion at this otherwise-good Instapundit post is typical.

    The discussion is misframed. The question isn’t whether a specific medical procedure is a good idea. The question is who gets to make the decisions.

    This is a comment that I left on a recent Neo-Neocon post:

    It’s the public-health fallacy, the confusion (perhaps willful, on the part of socialized-medicine proponents) between population outcomes and individual outcomes. Do you know how expensive that mammogram would be if every woman had one? The implication is that individuals should make decisions based on averages, the greatest good for the greatest number.
     
    The better question is, who gets to decide. The more free the system, the more that individuals can weigh their own costs and benefits and make their own decisions. The more centralized the system, the more that one size must fit all — someone else makes your decisions for you according to his criteria rather than yours.
     
    In a free system you can have fewer mammograms and save money or you can have more mammograms and reduce your risk. Choice. In a government system, someone like Kathleen Sebelius will make your decision for you, and probably not with your individual welfare as her main consideration.

    Even in utilitarian terms — the greatest good for the greatest number — governmental monopolies only maximize economic welfare if the alternative system is unavoidably burdened with free-rider issues. This is why national defense is probably best handled as a governmental monopoly: on an individual basis people benefit as much if they don’t pay their share for the system as if they do. But medicine is not so burdened, because despite economic externalities under the current system (if I don’t pay for my treatment its cost will be shifted to paying customers) there is no reason why the market for insurance and medical services can’t work like any other market, since medical customers have strong individual incentive to get the best treatment and (in a well-designed pricing system) value for their money. The problems of the current medical system are mostly artifacts of third-party payment and over-regulation, and would diminish if we changed the system to put control over spending decisions back into the hands of patients. The current Democratic proposal is a move in the opposite direction.

     

    7 Responses to “The Public-Health Fallacy”

    1. Ginny Says:

      Thanks for your clarity.

      Feeling like a number is not likely to make us feel confident about our chances.

      Free choice exercises muscles. Planning, choosing, taking responsibility – I could practically feel the burn as muscles grew when I began as an entrepreneur after years in academia.

      But it energizes – we do something about our health, we’re happier with the consequences, we accept that there’s no free lunch.

      We know damn well there isn’t, but the Senate drones on and we can get mesmerized. But, we suspect it isn’t going to work. Facing it is facing what we know is the truth. That’s energizing, too. What’s more draining than living a lie?

    2. Nicholas Says:

      ” … there is no reason why the market for insurance and medical services can’t work like any other market … ”

      Yes there is, and it’s called Congress…

      OK, so I’m cynical.

    3. juandos Says:

      Hmmm, even more blatant evidence that the people get the very government they deserve…

    4. Michael Kennedy Says:

      A couple of comments: There was an interest years ago in routine chest x-rays for screening for TB. There used to be mobile units that parked on street corners and people were encouraged to get chest x-rays. You have to be pretty old to remember them because TB went away as a major public health concern and skin tests got better. After TB was no longer a good reason, there was a movement to use the trucks (after all the money had been spent and there was a constituency to keep the program by those working in it) to screen for lung cancer. That lasted a couple of years until a study from Mayo Clinic (I believe) showed that early diagnosis made no difference in the cure rate. The mortality curve was not shifted and all that happened was to add a tail on the left with early diagnosis. The trucks were retired.

      Mammography is different because the mortality curve is shifted by early diagnosis. Not everyone believes this. I attended a meeting 25 years ago and heard a well known British cancer surgeon say that breast cancer cannot be cured. That every woman diagnosed with breast cancer will eventually die of the disease if she lives long enough. That is a distinct minority view but it is significant, I believe, that he was British.

      A friend of mine invested in a very interesting venture about 20 years ago. He was a radiologist and the venture was to be a chain of small mammography centers that would be placed in shopping malls. The center would be staffed by a nurse and an x-ray tech. The films would be read by a radiologist (him) in a central facility. He figured they could do mammograms for about $100. I don’t think anything came of it because mammography became a covered benefit. The private option couldn’t compete with free.

      About 20 years ago, I was one of the first surgeons in our area to do hernia surgery by laparoscopy. One of the equipment reps (They were observing the surgery for ideas on improving the equipment) was the wife of a police sergeant in a neighboring city. They got interested in having us do all the workmen’s comp hernias because they were back to work in a week instead of a month. The only reason they got interested is because they were self insuring and paid for both the medical care and the time off. Most of the time those two functions are separate and there is little incentive to combine them.

      There are lots of ways to improve the product of health care but many of them never happen because of the way it is paid for. The Democrats’ bills make this much worse. That’s ignoring the cost, etc.

    5. Laura(southernxyl) Says:

      “A friend of mine invested in a very interesting venture about 20 years ago. He was a radiologist and the venture was to be a chain of small mammography centers that would be placed in shopping malls. The center would be staffed by a nurse and an x-ray tech. The films would be read by a radiologist (him) in a central facility. He figured they could do mammograms for about $100. I don’t think anything came of it because mammography became a covered benefit. The private option couldn’t compete with free.”

      Baptist Hospital runs a mammography center tucked away in a corner of Macy’s at Oak Court Mall in Memphis, TN. I used to get my screens there, paid for by my insurance company. According to my EOBs, they did cost around $100. It was damn convenient to just pop in and get my name on the list, and shop and so forth, and show up to get that done, and go on shopping.

    6. Jamie Says:

      Holy smokes, what I wouldn’t give for a mammo center like one of these, especially if (for a fee, I assume) they’d give me images of my scans to take with me! I’m overdue by two years for a mammo because in order to get one at the center where my baseline and next two follow-ups were done (they have the original images and of course it’s best if you can always compare with the originals), I first have to visit my GP or OB-GYN and get a mysterious “code” on a prescription form. Then I call the center, giving the code like a secret password, and THEN I can get an appointment… for a month from now, or whatever.

      I’m b*tching because it’s inconvenient, but I’ll still take this degree of freedom and choice (I chose this mammo center because they’re really thorough and will read and re-read scans while I wait) over what we’re being “offered” in a New York minute. Doesn’t stop me from wishing for “Tan ‘n’ Wash,” though – get a mammo, shop for shoes, return for the results of the mammo…

    7. Michael Kennedy Says:

      I don’t remember why they never got going. In think the game plan was to do them for cash and it got too expensive to deal with insurance.