In FIRM
Saturday, January 10 2009
One of things that surprised me when I entered the blogosphere was the number of doctors billing themselves as “free-market” advocates. Do they teach economics in med school? If so, they don’t do a good job of it.
For example, Kevin links to an op-ed by a “free-market advocate” physician named Paul Hsieh. The op-ed is little more than a list of anecdotes from elsewhere, with scare quotes thrown in here and there – “reeducation” – to make it sound more ominous. But this post isn’t really about the op-ed.
Hsieh is the founder of Freedom and Individual Rights in Medicine. From their website:
Freedom and Individual Rights in Medicine (FIRM) promotes the philosophy of individual rights, personal responsibility, and free market economics in health care… Federal and state regulations and entitlements, we maintain, are the two most important factors in driving up medical costs. They have created the crisis we face today.
In Dr. Hsieh’s home state of Colorado, one of the key state regulations driving up medical costs is called Section 12-36-107; it sets the standards for physician licensure. Economics will tell you that the reason physicians cost so much is that they are relatively scarce. Colorado helps enforce the scarcity of physicians through licensure; requirements include “proof of graduation from medical school” and “passage of nationally recognized exams”. Who decides what counts as an accredited medical school? Other physicians. Who writes the exams? Other physicians. Section 12-36-107 in effect gives current physicians the ability to restrict the supply of competitors, thus ensuring higher salaries for themselves. (The fact that other actors – med schools, insurers, hospitals – have gotten their hooks into these salaries is a somewhat different issue.)
In a truly free market, the government wouldn’t require licenses of physicians (or, for that matter, require prescriptions for drugs). People could choose whether they wanted a doctor that finished med school, or passed their exams, or had sufficient experience, et cetera. Most people would want a physician with those qualifications, but some people would not be able to afford such care. Those people would settle for less-qualified physicians and the consequent risk of bad medicine, reasoning that something is better than nothing. But in Dr. Hsieh’s vision of free-market medicine, such people would have no access to care at all; they would be completely cut off from medical care because they can’t afford it.
We, the patients, generally think it’s okay to require government licensure of physicians, because it protects us from potential harm. But this is exactly the logic that Hsieh decries as “nanny-statism” when it comes to regulations that he thinks are keeping him from earning more money. If he doesn’t think people should use government to protect themselves from real harm, he can’t argue that government should protect his income. It takes zero principle and more than a little ignorance to argue for the “free-market” if you think that “the market” will earn you more money. In fact, truly free-market competition for medical services would likely drive down the costs – and incomes – for all providers. I, for one, would like to reclaim my “right” to buy medicine without interference, but instead the government says I have to pay my doctor for a prescription.
If Dr. Hsieh wants to dismantle the nanny-state, he should start where he has the most clout: physician licensure. But you won’t hear him arguing against licensure, because he’s only against government where he thinks it’s making him poorer. He’s all for dismantling regulations that protect patients, even if those changes make his patients sicker. Judge for yourself what sort of physician that makes him – but he’s certainly no economist.
We had “free market” medicine once, and it was circa 1930s when traveling “snake oil salesmen” would sell you all kinds of BS tonics and potions that were nothing more than placebo. The federal government was not involved at all in regulation of doctors or medicines, and as a result you had a sea of BS where you coudlnt tell the good stuff from the shams.
Color me not impressed. Regulations on practitioners and medicines are a good thing, not a bad one.
Just to clarify: I also think regulations are a good thing. My point is that a lot of people who advocate for a “free market” for health care are actually advocating for their own economic advantage in a still-restricted market.