Hat tip to Kling at EconLog :
Mayor Thomas M. Menino embarked on a highly public campaign yesterday to block CVS Corp. and other retailers from opening medical clinics inside their stores, an effort that exposed a rift between Menino and the state's public health commissioner, a longtime ally.
...The decision by the state Public Health Council, "jeopardizes patient safety," Menino said in a written statement. "Limited service medical clinics run by merchants in for-profit corporations will seriously compromise quality of care and hygiene. Allowing retailers to make money off of sick people is wrong."
In a separate letter, Menino urged members of the city's Public Health Commission to consider barring the clinics from Boston.
There's just so much wrong here. From rhetoric to results, this simply stinks of politics, stupidity, corruption and anti-market nanny-state special-interest laden JUNK.
I'm sure doctors are happy to not have to compete with nurses and health technicians for low level services. Talk of public safety is pure nonsense. If people feel safe getting low level care from lower level people, it's their CHOICE. I would feel safe. But then again, it's not about safety and they know it. It's about protecting vested interests from competition. Nobody's going to go for complex procedure at a clinic. People's choices and preferences would sort out who does what....just like with most other things that work just fine without this nonsense.
__________________________
Wal Mart wanted to do this on a large scale, didn't they?
Wonder if it will be hammered out state by state or even city by city.
Lots of stores already have pharmacies in them, or vision centers for glasses and stuff, or offer flu shots. I don't see much different about having a medical clinic. OTOH, I also see no reason that whatever regulations apply to hospitals performing similar work shouldn't apply to these clinics too -- certainly the government should have equivalent oversight ability.
__________________________Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
The problem...
...is that those regulations often prevent effective price competition.
For example, there are extensive medical occupational licensing regulations that disallow someone classified as a "nurse" from performing certain types of care, even though the nurse might be perfectly competent to do so. Instead, to perform that care, you have to bring in the correct type of specialist -- which of course is expensive, and often not practical for a walk-in clinic that doesn't take appointments. There are often fights over which group of specialists should be allowed to perform which procedures, in areas where there is overlap. (Do you need an orthopedic surgeon or is a physical therapist good enough?)
In effect, what we have are a bunch of cartels that have gotten laws passed, ostensibly to "protect the consumer", but in reality lining their own pockets with guaranteed business. They've outlawed their competition!
So fix those laws
rather than doing an end-around by changing the location where the care is provided. If the idea is to put a clinic in a department store or pharmacy then it should be an actual clinic, with the same rights, responsibilities, and qualifications for the range of care provided.
__________________________Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
Even if you believe in market forces
you have to concede that health care is not one of the areas where they work. It lacks the most basic elements required for the notion of a free market to operate.
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Veni, Vidi, Bitchy.
generalizations aside, explain
what you mean exactly given the context of this thread topic.
For market forces to operate
you have to have a number of conditions. Specifically the consumer has to have a choice from different competing vendors, and they have to be able to make that choice intelligently.
When it comes to health care people are fundamentally incapable of making the choice intelligently because determining which doctor is better relies on information not generally available and highly technical.
I have a lot of family that are in the healthcare business in different ways (doctors, therapists, psychologists, etc.), I've studied a certain amount of biology and anatomy, and yet I would have *no* idea how to rank the local, say, anesthesiologists, much less be able to meaningfully put a "what I'd be willing to pay them" amount next to their name.
Without the ability to choose a provide who offers good value for their cost there is no market incentive to improve, because even if you do nobody knows. Instead what you get is an incentive to do things as cheap as possible.
Which is exactly what has lead us to having clinics in a walmart type setting. Call it McHealthcare.
__________________________I came. I saw. I posted.
Veni, Vidi, Bitchy.
LOL. Are you giving me an econ lesson?
yes, yes, yes, we all know about "perfect information for perfect markets...bla bla bla. This isn't about perfect markets.
Nobody has perfect knowledge about hardly anything. Knowledge is learned and organized through experience and exchange.
You take it for granted in so many things that you receive more efficiently, cheaply, abundantly and in better quality than you would if markets were severely inhibited and not allowed to function.
This is purely about competition and market function.
This is simply about markets at work and unable to get better results because of perverse institutions. Not allowing clinics to operate in CVS pharmacies is one such example. Basically, we are inhibiting marketing and perverting them with strange, special interest rules.
Imagine if only dealerships were allowed to do any work on your car...down to a simple oil change? Knowledge is irrelevant here.
You should reread LZ's post. he made some great points about how simple market forces are twisted through a myriad of market distorting rules that essentially form cartels....leaving the consumer little choice and knowledge unable to spread and organize.
Well you did ask :)
We aren't talking about perfect knowledge, just functional knowledge. People by and large are completely incapable of judging the qualifications of a medical professional. They usually aren't competent to discern between multiple vendors at all, much less perfectly.
No, they are unable to get better results because of the fundamental nature of the matter. Do you want to argue that if I gave you a list of four urologists you'd really know which ones were better or worse, and be able to roughly gauge by how much better or worse they were so as to establish a price comparison?
Health care is generally going to come down to local monopolies for one simple reason- it requires a lot of expensive infrastructure for anything but the most routine care. Unless you live in a fairly metropolitan area you are likely to have one or maybe two choices of hospital nearby.
Now, granted, at the clinic level the barriers to creating an operation are much lower and hence you can have multiple clinics available offering some semblance of competition, but again clinics are only useful for the most basic of health care, and as above this still fails because people by and large cannot choose providers in any manner more meaningful than random selection.
__________________________I came. I saw. I posted.
Veni, Vidi, Bitchy.
Functional knowledge
"Use Quality-of-Care Report Cards" is one of the suggestions for improving our health care system
proposed by Harvard experts in a December Newsweek article.
I think the whole thing is worth a quick glance for those who haven't seen it yet.
__________________________Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
The same information issues exist in all markets
This is no less true of something like the computer market, where the average person buying a computer has minimal knowledge of how computers work. They can go off the computer-buying advice in various media sources, but a lot of the information in the media is wrong, too.
Heck, it's true in the food market. Does the average person really understand the difference between, oh, let's say, corn-fed beef and grass-fed beef? I've seen fancy restaurants that went out of their way to declare on their menu that their beef was corn-fed, as if this were a good thing. (Hint: it's not.)
*All* markets have incomplete information. Consumers are ill-informed about the merits of various products and producers, while producers are often equally ill-informed about the desires of consumers. To declare that the health care market is somehow "special" in this regard is simply not accurate.
It's not as though government licensing necessarily fixes this information problem. Licensing is binary: either you're licensed, or you're not. Skill, on the other hand, is a continuous scale. You can have two people who are both licensed and yet have vastly different levels of competence. Or you can have a licensed person who is less competent than an unlicensed person. Anyway, it's not as though licensing requires government involvement. Licensing could, and almost certainly would, exist in the absence of goverment, also -- it's just that unlicensed individuals wouldn't be prohibited from practicing. (They could still be prosecuted for fraud if they falsely claimed to be licensed.)
It is not the same
Buying a computer there are a host of computer stats available. There is no shortage of people with enough knowledge of the matter to make a solid suggestion. I'm not a computer expert but I easily have enough knowledge of personal computers to make a decent recommendation to a friend.
A more comparable example would be a person having to select a physicist from a list of candidates, but your average person has no reason to hire a physicist. In fact your average person has no contact with anyone with the level of competence and specialization as a doctor, except for healthcare and in their own field of specialty.
I don't go out shopping for a forensic entymologist, and if for some reason I had to I wouldn't know where to begin. I can tell you a little bit about material scientists but that's only because I work with so many.
But at the same time they know the difference between beef and Tuna. Most people don't know the difference between a podiatrist and a pediatrician, or between a psychologist and a psychiatrist.
The difference is one of severity.
I agree. While licensing is important to maintain a minimum competency, it does not, as you say, give enough information on its own to allow meaningful distinctions to be made.
__________________________I came. I saw. I posted.
Veni, Vidi, Bitchy.
You're overstating your case, Tlaloc
The point of the thread, if we can get back to the original points, is that health care markets are plagued on a very fundamental level of basic market function by rules and regulations that make these markets work less well than they would if there wasn't such a stranglehold on market participation rules. So many problems emanate from this condition and they should be appreciated in how the effect the whole process.
Markets agents do not "act and participate freely" as it stands.
That's step one. Over and above that, any imperfect knowledge or "nonfunctional" knowledge is secondary.
And yes, lower level skill care is not allowed to influence the market properly because it can not freely compete with specialists. The ripple effects from such conditions are unable to take foot.
All these basic ingredients of knowledge, competition, choice, free entry into the market are all integral and need to be somewhat functional so the price mechanism can function properly.
Take any market that isn't obstructed by these hampering conditions and apply these distorting rules to them and it's easy to imagine the perversions we would see.
What's the point, John?
This is seriously reminding me of the Life of Brian part:
I'm telling you that because of the fundamental issues of healthcare that market forces will never work and you're telling me we need to remove the artificial barriers to letting market forces work.
What is the point of fighting for healthcare's right to have competition when it can't have competition?
I don't get how you call something as fundamental as the inability to rank vendors "secondary" while calling something as minor as some regulation of the market primary.
The primary issue here is that you could have no regulation whatsoever and it would still fail to act according to free market principles because of the fundamental nature of the issue.
That's the first and last point to make because it completely invalidates the argument that we need to promote competition. There is not, and never will be, competition in the way you mean.
__________________________I came. I saw. I posted.
Veni, Vidi, Bitchy.
Forget theory, health care price competition already exists
People go to Mexico, Thailand, etc. to get operations "on the cheap." The quality may be suspect, but the price is definitely lower.
A similar sort of price competition is taking place with telemedicine. Why analyze an X-ray in the US when you can send it electronically to a technician in India?
Yes they do, which indicates a problem
As I said before:
And it works on the consumer side as well. Wth no ability to discern good from bad people naturally gravitate towards the cheap.
That is not market forces at work, because the reward is not commensurate with the risk or cost.
__________________________I came. I saw. I posted.
Veni, Vidi, Bitchy.
Nevermind, Tlaloc
Nevermind...sheesh.
And "market" doesn't mean "individuals pick their own doctors"
More likely, you would still end up with something not entirely dissimilar to today's HMOs or PPOs: networks of doctors under a single "brand name." You wouldn't pick a doctor, you'd pick a network of doctors.
Branding is, after all, a standard market mechanism for trying to differentiate your product's (perceived or actual) quality when the average consumer might not be able to tell the difference.
Great so now
instead of judging individual doctors you have to judge a whole group of them compared to other groups. This helps how exactly?
__________________________I came. I saw. I posted.
Veni, Vidi, Bitchy.
You don't have to
Someone else, someone with more medical expertise, reviews them and publishes their review in the media.
Worst case, there's word of mouth. This already happens. In California, I know that Kaiser has a terrible reputation -- justified or not, they do. People don't trust Kaiser doctors. As for me, I went to a facility called the Palo Alto Medical Foundation. Why? Because my former boss's mom is a nurse, and she had worked at a bunch of different facilities and said that PAMF's doctors were a cut above the rest (their hiring was much more picky).
I have a similar experience
My mother is an occupational therapist at a fairly major hospital in Oregon. Growing up she very tightly controlled which doctors could treat me and which couldn't beause she *knew* which were quacks and which were good.
Now ask yourself how many people have a family member working for a hospital in the town where they live (I no longer do since I don't live where I grew up anymore)? How many people have a "former boss' mom" who is willing to, and capable to, give good advice about providers?
The answer is that that group is small enough to be negligible. There is always word of mouth but word of mouth is not exactly reliable.
You and I are lucky ones who got to make our decisions based on some credible information. We are a distinct minority though. Right now my wife is trying to find a Primary Care Physician. All she has to go on is a list from the insurance of who is in network. Nothing that remotely speaks to quality, and so she'll have to basically pick one at random (or more correctly based on criteria that have nothing to do with competence, such as their proximity to our house) and hope for the best. If the person is an obvious quack she'll have to start over. If they are a subtle quack her life may well be risked. It's a total crapshoot.
__________________________I came. I saw. I posted.
Veni, Vidi, Bitchy.
Emergency care
A very large force that distorts the market with respect to emergency care is that hospitals must stabilize anyone who comes in with a health emergency, even if that person cannot demonstrate their ability to pay.
Name any other business that is required to provide goods or services to someone who cannot pay. I'm not too sure that you can. There are some who elect to render service before payment, but I'm not so sure there are any who are required to by law.
In a free market, hospitals could turn away people with bona fide emergencies if they wanted to. I can guarantee allowing them to do so would decrease costs. People who lack the ability to pay for emergency care usually end up either declaring bankruptcy or the debt incurred for services is sold to a collector. In some cases, a payment plan can be worked out. Because these people have trouble paying, the hospital must raise costs on those who do have insurance to make up the difference.
The solution to keep premiums down is to make sure everyone is covered via some sort of government mandate, be it either single-payer or something else. I know what I prefer...
As far as emergency care goes, there aren't too many options other than making sure everyone can pay for services or turning away those who can't pay.
__________________________I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
My rather crazy views on uncompensated care, etc.
Suppose we had mandatory birth control. The only way to get your birth control deactivated would be to put down, let's say, a $100K deposit in an interest-bearing account to cover the costs of education, health care, etc. for your future child. This account would, in effect, ensure that your child could not become a burden on society. Your deposit could be refunded if you got the birth control reactivated without a pregnancy.
The birth control wouldn't need to be strictly mandatory, but if you opted out and failed to put down your deposit, your kids wouldn't be citizens. No more birthright citizenship. In fact, this could replace our current immigration and citizenship policies entirely: if you want to become a US citizen, just plunk down $100K in one of these accounts, and you can be a citizen tomorrow. (Maybe we could reduce the amount for adults, because we're not paying for your education at that point.)
Totalitarian? Yeah, but less totalitarian than other people having kids they can't afford, and then expecting me to pay for it. :)
I agree
That's very totalitarian. It'd be a lot less totalitarian (but perhaps "worse") to just let children starve if their parents were idiots and didn't take care of them.
But I'll tentatively agree on birthright citizenship. We should eliminate that by constitutional amendment. I'd give citizenship to children of people here on proper work visas, but not foreign nationals who are here simply to have a child.
__________________________I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...