That said, it appears that the Feds are basing their recommendation on sound statistical evidence. If you ever, on a theological basis, wanted to know how God can know everything, but yet still allow free will, then study statistics, or more specifically, the law of big numbers. The bigger the sampling data, the more you can predict virtually anything. So, as someone who believes in statistics, the Feds are probably right on this one.
But here's the problem: a woman deciding to start mammograms at 40 or 50 isn't going to play the percentages the way that I might. That's because, if the woman chooses wrongly, SHE DIES A HORRIFICALLY PAINFUL DEATH. Or, at least, she becomes disfigured and suffers greatly. Given that a HORRIFICALLY PAINFUL DEATH and/or DISFIGUREMENT is highly disfavored, women will, by and large, choose to continue to getting mammograms at 40, as well as do self-exams.
12-Year-Old Boy Scouts Volunteer To Give Women Breast Exams
All jokes aside, this represents a fundamental issue in health care - when faced with a risk of death, people will tend to overconsume health care. And, let's face it, when choosing between extra expense and HORRIFICALLY PAINFUL DEATH, the odds go out the window. That's why Doctors don't compete based on price, but rather, on the services they provide. Medicine is the only market where competition raises costs.
I think your last line is a mistake...If everyone got an MRI, the cost would go down. Competing for the business would cause deals and offers. The more MRI's that are given, the less the doctor's office needs to charge in order to recoup the cost of the MRI machine. Once it is paid off, most of the money collected for all subsequent MRI's is cash to the bottom line, which encourages more MRI's to be performed. In order to increase demand, the office will advertise a "30% off" special or a "Buy-One, Get One" Christmas deal.
ReplyDeleteYou're right and wrong at the same time. The overall cost of getting a MRI would drop due to increased supply, BUT the overall cost of medical care would go up as doctors sought to defray the costs of buying MRI's.
ReplyDeleteThe main point being, of course, is that competition between Doctors is over quality of care and not cost because the consumers of that care place a premium value on their lives. In economic terminology, demand is inelastic.
Jim, I'm afraid that's an economic fallacy. Price isn't set by cost, it is set by the balance of supply and demand. If doctors could raise prices at will they already would have. Actually, considering the rate health care costs rise maybe they can...
ReplyDeleteAnyway, the problem I see is that every doctor wants to make money from offering MRI's (and other imaging) as a service. Ever gone to a new doctor and had a test repeated that your referring physician already performed? If they accepted data from a service provider then you could get an MRI performed on your own terms and companies could form to provide the service profitably at different price points, low if you can wait for a common MRI and high for rush jobs and specialty scans.
Of course for competition to be really effective in lowering prices you need an educated consumer, at least the ability to understand basic statistics used to assess the effectiveness of different medical treatments.
WSJ had a good article this weekend linking usage and cost...will see if I can track it down.
ReplyDelete