The follies of semi-socialized medicine

In the 3/3/2005 edition of USA Today (sorry, no link), we see an interesting statement: “For the past quarter-century, the American Medical Association and other industry groups have predicted a glut of doctors and worked to limit the number of new physicians.” Further down, the story notes “Congress controls the supply of physicians by how much federal funding it provides for medical residencies – the graduate training required of all doctors”.

The story goes on to deliver the shocking news that the prediction of a doctor glut wasn’t quite accurate, and that thanks to that work to limit the number of new physicians, we’ve got a shortage now.

Jesus, didn’t these guys learn anything from the failure of the Soviet Union? Those Five Year Plans didn’t work. You can’t predict with any accuracy the total amount of anything that the whole country’s going to need.

I wish I had a dollar for every time someone said that health care was too important to leave up to the free market. That makes about as much sense as saying that passenger airline flights are too important to leave up to Bernoulli’s Principle. The alleged importance of health care isn’t going to make bureaucratic controls on the supply of doctors work any better than bureaucratic controls on the supply of steel, nor is it going to magically endow Congressmen or bureaucrats with the superhuman intelligence needed to get a better answer than millions of people acting on undistorted price signals would arrive at.

And remember when you find your medical bills going up, and your wait to see a doctor gets longer, that your government took deliberate action to reduce the number of doctors as part of its ongoing effort to protect you from the cruel free market. Be sure to show your appreciation next election day.

14 thoughts on “The follies of semi-socialized medicine”

  1. I assume that the AMA, which isn’t different in principle from other labor unions, wants a shortage of doctors.

  2. Bingo!

    It’s pretty well-accepted among economists that the AMA tightly controls the number of medical residencies in order to restrict the number of doctors, and hence keep their own pay high.

    One (perhaps unfortunate) thing about labor unions is that the strongest ones are always those representing highly skilled workers whose training takes a long time– doctors, airline pilots, etc. Their are already paid very well, so union action in the aggregate can actually increase the gap between lesser and greater skilled workers.

  3. The really neat trick is how these high-pay unions have managed to convince lawmakers and voters that this racket has the purpose and effect of protecting consumers of their services!

  4. John Thacker…I’m not sure how airline pilots fit in this scenario. There are no constraints on the number of people receiving the Airline Transport Pilot certificate; if you can pay for the training and pass the tests, the FAA will give you one. It’s then up the the airlines whether to hire you or not.

  5. Here is a USA Today article from 3/2/05 entitled Medical miscalculation creates doctor shortage.

    The article contains a section titled Controlling the Supply which claims (accurately it seems to me) that the supply of doctors is controlled by federal funds rather than the marketplace.

  6. David Foster–

    The pilots don’t restrict their numbers, true. But their unions are very, very effective when it comes time to negotiate wages. Pilots’ strikes are extremely effective, as are threats of them. Strikes by the lower-wage airline employees, for example, are much less so.

  7. I was merely using the airline pilots as another example of an extremely effective union. Unions are most effective when it’s difficult to find replacement workers quickly (rather obvious, I admit.) But those tend to be highly paid skilled employees in the first place whose jobs can’t be easily replaced or mechanized.

  8. A large percentage of local doctors are not native born (and an even larger percentage were not when we first moved here and it was a much smaller, if fast-growing, town). Is there some relation? (I’m not complaining; these doctors seem not especially bad, though sometimes the lack of a common language has resulted in some less-than-first-class care.)

  9. Can you believe this stuff?

    VA gets fit with tech
    Health care system’s users find technology reduces problems

    Special report: Health IT

    A model patient records system

    BY Bob Brewin
    Published on Feb. 21, 2005

    More Related Links
    The general perception from the outside is that the massive Department of Veterans Affairs health care system is outdated. The VA’s bureaucratic system is largely seen as a last resort for veterans who are too poor to afford care in better-equipped and better-staffed private hospitals, which are perceived as providing better care.

    The size of the system is undisputed: The VA operates 163 hospitals and 850 clinics nationwide that treat about 4 million veterans a year.

    But perceptions may not match reality, particularly in terms of the technologies the VA health care system uses, said Scott Wallace, a former lawyer and venture capitalist who is now chief executive officer of the National Alliance for Health Information Technology.

    Six years ago, Wallace’s father, a veteran, had a series of adverse drug reactions at a private hospital under the care of more than 20 doctors. A doctor friend advised Wallace to take his father out of the private hospital and put him in a VA hospital.

    Wallace said he found the quality of care his father received from the VA superior to that of the private hospital, in part because of the quality of the department’s information systems.

    At the private hospital, the teams of doctors who cared for his father had no common communications platform, Wallace said. By contrast, at the VA hospital, clinicians could easily tap his father’s health record via the VA’s Veterans Health Information Systems and Technology Architecture (VISTA).

    At the VA, “everyone had the information at the time they needed it” to provide the best care for his father, Wallace said.

    This experience at the VA turned out to be a transformative event for Wallace, who in 2003 gave up his venture capital business to become an advocate for the national development and deployment of the kind of electronic health care systems that have routinely been used at the VA for more than 20 years.

  10. Mark,

    Interesting. I’d be interested in seeing some comparison of staff/patient ratios for VA vs. private hospitals. The reason is that a local hospital I am aware of has been trying to implement a patient information system that sounds very similar to VISTA and having a great deal of difficulty doing so. The problem (as I understand it from heresay) is that treatment data frequently fails to get entered into the system or retrieval is so slow that it interferes with treatment and staff then circumvent the system.

    The reasons for failure to get data entered appear to be heavy patient loads (staff claim to not have the time to treat patients AND enter data) and a combination of what sounds like poor interface design and poor training. The delay problem seems to be primarily in the administration of drugs. In order to check for drug interactions all drugs, on a per treatment basis, must be retrieved from the hospital pharmacy. This means some human must physically run to the pharmacy to retrieve each dosage to be administered. Needless to say this puts both physical and timing strains on staff and, people being clever, they find ways to circumvent the system. Anytime one circumvents a system that relies on centralized information and control – whether that is a good idea or not – the system is weakened and performs suboptimally leading to more circumvention and, if the problems are bad enough, a system death spiral.

  11. Who do you think receives higher-quality health care. Medicare patients who are free to pick their own doctors and specialists? Or aging veterans stuck in those presumably filthy VA hospitals with their antiquated equipment, uncaring administrators, and incompetent staff? An answer came in 2003, when the prestigious New England Journal of Medicine published a study that compared veterans health facilities on 11 measures of quality with fee-for-service Medicare. On all 11 measures, the quality of care in veterans facilities proved to be “significantly better.”

    Here’s another curious fact. The Annals of Internal Medicine recently published a study that compared veterans health facilities with commercial managed-care systems in their treatment of diabetes patients. In seven out of seven measures of quality, the VA provided better care. It gets stranger. Pushed by large employers who are eager to know what they are buying when they purchase health care for their employees, an outfit called the National Committee for Quality Assurance today ranks health-care plans on 17 different performance measures. These include how well the plans manage high blood pressure or how precisely they adhere to standard protocols of evidence-based medicine such as prescribing beta blockers for patients recovering from a heart attack. Winning NCQA’s seal of approval is the gold standard in the health-care industry. And who do you suppose this year’s winner is: Johns Hopkins? Mayo Clinic? Massachusetts General? Nope. In every single category, the VHA system outperforms the highest rated non-VHA hospitals.

    Not convinced? Consider what vets themselves think. Sure, it’s not hard to find vets who complain about difficulties in establishing eligibility. Many are outraged that the Bush administration has decided to deny previously promised health-care benefits to veterans who don’t have service-related illnesses or who can’t meet a strict means test. Yet these grievances are about access to the system, not about the quality of care received by those who get in. Veterans groups tenaciously defend the VHA and applaud its turnaround. “The quality of care is outstanding,” says Peter Gayton, deputy director for veterans affairs and rehabilitation at the American Legion. In the latest independent survey, 81 percent of VHA hospital patients express satisfaction with the care they receive, compared to 77 percent of Medicare and Medicaid patients.

    Outside experts agree that the VHA has become an industry leader in its safety and quality measures. Dr. Donald M. Berwick, president of the Institute for Health Care Improvement and one of the nation’s top health-care quality experts, praises the VHA’s information technology as “spectacular.” The venerable Institute of Medicine notes that the VHA’s “integrated health information system, including its framework for using performance measures to improve quality, is considered one of the best in the nation.”

    The Best Care Anywhere
    Ten years ago, veterans hospitals were dangerous, dirty, and scandal-ridden. Today, they’re producing the highest quality care in the country. Their turnaround points the way toward solving America’s health-care crisis.

    By Phillip Longman

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