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  • US “Free Market” Medicine

    Posted by TM Lutas on December 12th, 2005 (All posts by )

    There was a time when I actually believed that there was a functioning free market in US medical services. Experience has taught me that this is by no means the case.

    I may have mentioned before that my wife is opening a primary care practice in Bolingbrook. It’s been a long haul but we’re finally open for business. One of the key matters in any business is setting prices. Here’s how it’s done these days in our “free market” us medical system.

    1. Look up your Medicare geographic zone (set by the US Government)
    2. Download the price list for that zone
    3. Enter those prices in your billing software

    There are all sorts of restrictions on price flexibility. Even if you don’t accept Medicare, even if you don’t accept Medicare assignment (ie, you’re not part of the program and the patient gets Medicare reimbursement at home after you’ve taken their money at the office), you still have a “limiting charge” that you’re not allowed to exceed if your patient is a Medicare participant.

    You’re also not permitted to discount your prices under certain circumstances. If you accept insurance, cash patients are pretty much forced to pay the highest rates for your services even though they are your most preferred payers (you get your money quickest and with the least cost and fuss).

    Clearly, if you can’t set your own prices but are largely cutting and pasting in numbers from a government provided spreadsheet, this situation is not a free market. Yet it’s also not socialized medicine. So what is it?

     

    24 Responses to “US “Free Market” Medicine”

    1. David Mercer Says:

      It’s the fascist economic model….not the fascist political system, that’s an entirely different axis.

      But it is indeed fascist, in the literal, economics sense of the word. Under a fascist economic system the govt., unlike under a communism, doesn’t own the means of production, but they heavily regulate which private parties may enter into which lines of business, and dictate many aspects of how they may operate, often (usually?) including prices.

      The old adage that you become the worst in what you hate seems to have come home to roost, huh?

    2. TM Lutas Says:

      The problem with calling it fascism is the unfortunate habit of some leftists to call everything they don’t like fascist. After decades of this, it’s easy to get lumped in as just another incoherent left wing critique. The technically correct term is thus unusable as serious commentary.

    3. Andy Freeman Says:

      Why didn’t your billing software provider configure it with the relevant prices?

    4. Shannon Love Says:

      I’m with David Mercer on this one. Our current regulatory system is very close to the Fascistic economic model. Pejorative connotations aside, the parallels are disturbing.

      Private property and economic freedom functionally mean the ability of individuals to make decisions about the use of that resource not whether the individuals name is on a particular deed or other legal document. In the Fascistic model, individuals still notionally own property and businesses but the number of decisions they get to make about their property rapidly shrink as the government mandates more and more decisions. Eventually, the individual is not making any decisions at all but merely effecting the decisions of the government.

      This is clearly the pattern we see in evolution of economic regulation in the 20th century. People notionally own their own property and businesses yet their ability to make independent decisions about those properties and businesses continues to shrink as the state mandates more and more decisions. This evolution is made politically possible by the implicit assumption of many that the state knows better how to manage economic assets than do individuals.

      Kelo is the ultimate expression of this mindset. Kelo is based on the idea that individuals get to make decisions about their own property only if those decisions conform with the ideas of the state. If not, then the state has both the right and duty to take the property away from the individual an allocate it to another individual. The functional difference between this practice and outright state ownership is largely fictional.

    5. Billy Beck Says:

      “Under a fascist economic system the govt., unlike under a communism, doesn’t own the means of production, but they heavily regulate which private parties may enter into which lines of business, and dictate many aspects of how they may operate, often (usually?) including prices.”

      My god, how long is this going to go on? Look:

      There is no essential moral or political difference between “own[nership]” of goods and the authority to dispose them. If you cannot do what you want to with what you “own”, then you don’t own it.

      Lutas: you are describing “socialize medicine”. That’s what it is. You are perplexed over the degree of the applied socialism. That’s all.

      When are you people going to start thinking in principles?

    6. TM Lutas Says:

      Andy Freeman – There are multiple reasons why the billing provider doesn’t want to touch this with a 10 foot pole:

      1. liability reasons – If Medicare sues the doctor for pricing too high you’re going to be involved in the suit even if the doctor changed the pricing on his own.
      2. complexity – Pricing changes in the county of treatment. If the installation is for a practice that spans counties, that can mean two entirely different price lists.
      3. don’t ask, don’t tell – They just don’t want to go near the mess even absent liability reasons.

      Shannon Love – I believe that there is such a thing as liberalism that describes the policies of Washington, Jefferson, and the vast majority of the founding fathers. If I say that I’m a liberal, that’s not the message that gets conveyed. I have to say classical liberal to get my meaning across. As a term of art, I don’t doubt that what I described fits the fascistic economic model (right along with the disturbing cost shifting and careening towards collapse aspects of it) down to a ‘T’ but the question that I’m after is what should it be called in communications with laymen when the term fascistic has undergone such debasement? How do I get my meaning across?

      Billy Beck – I think that you’re simplifying things down to an non-useful level of granularity. If the entire world is a bastion of socialized medicine, what was all the fuss about regarding Hillarycare?

    7. Shannon Love Says:

      “the question that I’m after is what should it be called in communications with laymen when the term fascistic has undergone such debasement? How do I get my meaning across?”

      That is a tough one. I’ll have to think about it.

    8. Joe Calhoun Says:

      A term we used in the Navy comes to mind:

      Clusterf**k

    9. MD Says:

      I’m surprised more people don’t know about this. Doctors can’t just charge what they think is the correct charge. And charges, *actual* reimbursements and costs are so totally unrelated in practical terms as to be a fantasy land. It would be hilarious if it weren’t so utterly sad…..

    10. Half Sigma Says:

      This is EXACTLY what I’ve been saying on my blog for a long time. For example, read this post that I wrote.

    11. Jonathan Says:

      The current system abuses patients who pay their own bills at the time of service. Such customers should receive the best prices and service but instead pay top dollar while nominally-insured deadbeats get the benefit of negotiated discounts. Plus, while physicians are almost always easy to deal with, their clerical staff often, in my experience, treat the independent-minded self-payer as a troublemaker. (You don’t want to tell us your Social Security number? Aha, you must be trying to defraud us, etc.)

    12. Brock Says:

      The problem of finding a term that you can use to speak to Joe Layman is that all the relavant terms have been bastardized and smeared by popular usage. No one uses any of the terms accurately anymore (not in popular discourse, not on TV debates). We pretty much have to define any term before we use it. This happens to me all the time, and I’m at law school, where people are supposed to be good at that kind of thing.

      Eh, just call it price controls. Indirectly it could also fairly be called Doctor Wage controls. “Remember Nixon’s brilliant wage freezes? Think rent control is a great idea? Welcome to modern medicine!”

    13. Billy Beck Says:

      “If the entire world is a bastion of socialized medicine, what was all the fuss about regarding Hillarycare?”

      The answer to that question is in the difference between a hand-grenade and a five hundred pound bomb. What’s the unifiying concept between the two of them? Something like “combat explosives” would do. That’s what they both are, despite their differences of degree.

      This is what principles do. It’s what they’re for.

      And it is laughable for you to complain about “granularity” while you’re unable to get past an instance-to-instance epistemology in order to order things according to their principles.

    14. Boris A.Kupershmidt Says:

      It’s not socialized medicine, yet.
      But it’s moving that way.

    15. Ginny Says:

      We’ve won some & lost some – surgeries are amazingly less invasive than a few years ago; medicines are wonderful. But I can see why your wife wants a more personal practice. As a patient I’d like a more personal service.

      I seldom see the same doctor twice in a row at our local managed care; the diagnoses are often a bit wrong and sometimes quite wrong. And meanwhile, one of the last doctors started on what was clearly a rote tirade about the evil of the vast corporations of pepsi/coke and how the government doesn’t control them because they make so much money. (I pointed out that they probably wouldn’t make so much money if we didn’t like to drink them.)

      Perhaps I spend too much time around Chicagoboyz but I’m beginning to not trust people who think corporate greed is behind all our problems – especially when I’ve just spent five days in the hospital because this managed/socialized care meant no one was competent – or at least responsible. (The anti-coke doctor wasn’t the one who misdiagnosed me, but he’ll do to complain about; he also hates Walmart – don’t you just love it when a guy on a doctor’s salary complains about Walmart?)

    16. Tyouth Says:

      Re. the use and meaning of the word “facism”:

      TM and Shannon,

      When the meaning of a word is popularly abused I suppose that the only defense against Orwellian double-speak is to be aware of the abuse and explain and give examples of what “facism” (in this case) is and has been.

      This is a drag but necessary. Experience indicates that this can be difficult when talking with emotional leftists (“good grief we’re having a conversation here, not the prologue of a fist fight!”) but one must keep cool and gently instruct, I guess.

    17. TM Lutas Says:

      Jonathan – You’ll love my wife’s clerical staff, she doesn’t have one. She picks up her own phone and after hours phone calls go to her cell phone.

      Billy Beck – I think that you have no idea of my ability to draw broad principles and stick to them. I’m reasonably sure that we haven’t met enough times to draw such a personal conclusion.

      Regarding your “unifying theme” idea, discussing combat explosives is all very well and good but you had better be prepared to make quick and sure distinctions between the hand grenade and the 500 lb bomb in real world combat. The linguistic point is that we seem to be rather ill equipped to do so and it is serving the cause of economic reform in general and medical economic reform more specfically (which I suspect we’d be on the same side on) poorly.

      Ginny – My wife is accepting patients. She’d love to have you on board.

      Tyouth – You’re essentially proposing the reversal of the blanket demonization of fascism. Nobody wants a repeat of the Nazi death camps so anything fascistic must be drummed out of the public square. But if we admit that we’ve been cribbing notes from the fascists in our economic policy, maybe some of those Holocaust deniers who’ve been saying that “Hitler had his good points” weren’t so crazy after all. We end up then seriously considering hitlerian policies without a lot of practice at fighting them. We haven’t had to for 60 years.

      Unwinding a taboo this explosive is best done very carefully.

    18. Ken Says:

      “Tyouth – You’re essentially proposing the reversal of the blanket demonization of fascism. Nobody wants a repeat of the Nazi death camps so anything fascistic must be drummed out of the public square.”

      Sounds good to me.

      “But if we admit that we’ve been cribbing notes from the fascists in our economic policy, maybe some of those Holocaust deniers who’ve been saying that “Hitler had his good points” weren’t so crazy after all.”

      Or maybe we say “How about we stop cribbing notes from the fascists in our economic policy”? We know the fascists were all about stamping out individual freedom wherever they could find it; their brand of economics was another variation on that basic theme, and those who embrace it should be called on it.

      This doesn’t mean we should do things like denounce vegetarianism because Hitler was a vegetarian, or the Humane Society because Hitler was nice to his dogs. It means that the fascist economic model had the same goal as the fascist political model, to strictly control and regiment all the people and make their goals and their very lives subordinate to the almighty state, and cribbing policies that were designed by the fascists to strictly control and regiment their populations is a pretty good sign that you have a similar end in mind yourself.

    19. Half Sigma Says:

      “I’m beginning to not trust people who think corporate greed is behind all our problems”

      Greed is part of the human condition. The laws should direct greed so that it produces activites that benefit the greater good.

    20. TM Lutas Says:

      Ken – How many people are in favor of “public-private partnerships”? These are far too popular as political ideas that if you tagged them as fascist (and very often they are in a strict economic sense) you’d legitimize fascism for too many people to be safe.

      I’d rather give up the advantage of the label and argue from first principles, demonstrating the anti-fascist economic case all over again, rather than let that genie out of the bottle and risk an uptick in legitimacy for fascism, the whole ball of wax. Unfortunately, that still leaves me stuck for a label that’s at least somewhat respectful of the poor deluded fools that believe this sort of economics actually works over the long haul.

    21. Sandy P Says:

      Hey, neighbor – not too far from you.

    22. Ginny Says:

      Off topic, but I can’t resist anecdotes:

      And corporate greed is often best satisfied by producing a product (coke, Walmart) that actually satisfies the needs of its customers. When corporate greed lusts for a monopoly, the government regulates heavily; the big player is more likely to both influence the regulations and be able to meet them. A government that manipulates the market place may be fascist.

      Then there is tribalism: small businesses have other ways of establishing monopolies – the father of one my daughter’s friends went to jail for hiring a hit & then fire bombing a competing night club. Maybe I’m crazy, but I dn’t think coke or Walton’s kids do that.

    23. Billy Beck Says:

      “I think that you have no idea of my ability to draw broad principles and stick to them. I’m reasonably sure that we haven’t met enough times to draw such a personal conclusion.”

      I never met Aristotle, either. What’s your stupid point?

      What you write makes the thing obvious enough, most certainly in the instance that I’ve pointed out. I don’t have to make your personal acquaintance. Solzhenitsyn once pointed out: “To taste the ocean requires but a single drop.” He was pointing out the power of principles and concepts. He was absolutely right, and you’re a good exhibit.

    24. TM Lutas Says:

      Billy Beck – Sorry, I’ve been to the meetings. I’ve heard how legalizing heroin is the “acid test of freedom” and if you’re not ready to, right there, right then, vote for immediate free market opium, you’re a traitor to the cause of freedom. Color me not impressed with the results this sort of advocacy has accomplished during the decades its cratered spectacularly in the form of the Libertarian party’s electoral results.

      My “stupid point” is that it’s useful to actually have conversations on the topic at hand (health care, in this instance) without having a half-hour pre-discussion about how, no, you’re not really trying to say that your conversation partner’s aunt Minnie should have hung at Nuremburg because she’s not quite keen on losing her subsidized pills.

      What I am striving for is a method of having a conversation that neither disturbs societal taboos against tossing fascism around lightly nor concedes the fight that there is something very wrong with the way the prices for medical services are set in the United States of America.