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Why medicine is not a market practice

May 8, 2017

It is Kevin D. Williamson’s turn to write the trite view of medical care that is trotted out by conservatives in every political discussion of it, starting from a textbook explanation of economic scarcity and human desire:

“Scarcity” is a term from economics, and it refers to the fact that there is never enough of anything to satisfy every possible desire — the universe holds only so much, and human desire has a way of outgrowing whatever we have.

Ah, human desire, which in most material wants and services, can always buy better or more from the market. That high-end BMW may cost twice the Honda, and does so well at scratching certain consumer itches. If it is good to have a new minivan for taking the kids to school and soccer, it’s also nice to have matching his and her Porsches for those jaunts to the hill country. And a pickup to tow the fishing skiff. And the five-bay garage for all that. And so it goes, with every product and service from designer purses and fancy desserts to haircuts and pet care.

If Williamson had delved a bit more into economics than just his political readings, he would have encountered the fact that the traditional market model relies on some assumptions about goods and consumer behavior for which medical care is the textbook counter-example. The delivery of medical care has several characteristics absent from the market for designer purses or paintings, and mostly absent from the market for cellphones or cars:

  • More is not better. If you are rich, it does no harm to buy several of the latest smartphones, decide which you like best, and give the others away. If you can afford a high-end BMW, there is no harm to buying that instead of a Honda. Medical care is different. Something as simple as getting an extra diagnostic exam doesn’t just cost more money. It also exposes patients to side effects and to the risk of over-treatment when it uncovers problems that otherwise would have been better left alone. Medical overutilization isn’t just an expenditure of economic resources. It leads to objectively worse results.
  • Yes, there are non-economic, objective measures of overall quality. That distinguishes medical care from the market model where consumer preference is king. The harm of overtesting and overtreatment is measured first in morbidity and mortality. Not in dollars and cents. And not in patient preference. Standards of care are not determined from market response to upselling. (Now, yes, highly engineered devices such as cellphones and cars are subject to standards every bit as technical as for medical care. But, because they are consumer goods, those largely are secondary to how they are marketed. A cellphone purchaser who actually investigates the camera’s barrel distortion or aliasing falls into the nerd corner of the market by virtue of that.)
  • Information asymmetry. Most people are quite naive in their understanding of disease, and about the potential benefits and risks from various medical treatments. That is the reason that doctors, facing a fatal illness, typically spend more time with their families and more rarely pursue chancy or heroic treatment. I can’t help but wonder if Williamson’s rich friend who died after expensive and experimental heart surgery might have done differently if he were an experienced cardiologist.
  • Desire doesn’t rule. “I just wanted it” is a fine reason to buy a painting, a purse, or a smartphone. It is a lousy reason to subject yourself to medical care. So much so that seeking out medical care for pleasure is an element of a psychiatric diagnosis. And unlike someone running a spa or an art gallery, doctors have a profesional obligation not to do what has no medical benefit.
  • Market demand is a bad thing. It’s quite appropriate for those working in Apple marketing to try to convince everyone in the world that they should want the next iPhone. In both sizes. In contrast, an oncologist wants to administer chemotherapy for lung cancer only to the small slice of the population who actually would benefit from it. More, the oncologist wants that slice to be as small as possible, and works with the rest of the medical community to depress smoking and other things that increase the incidence of cancer. An oncologist who complained that such advocacy is contrary to his business interests should have gone into marketing, rather than into medicine.

This is America. Every paunchy, middle-aged man who has more money than sense can buy testosterone supplements from a doctor who hasn’t yet lost his medical license for catering to market demand. Ignorant actresses make second careers from peddling stupid and dangerous medical advice. Those who were raised on Leonard Read’s pamphlets can pay writers like Williamson to stroke their political habits. And in many ways, medicine is viewed and treated like a business in a traditional economic market.

That helps explain why the US is the unfortunate outlier in the graph below. Since the 1970s, all those other nations suffered less from exploding health costs. At the same time, they all surged ahead of the US in the life expectancy of their citizens. Something that fell in the US last year for the first time in decades. Spaniards now can expect to live four years longer than Americans. Those nations all have universal healthcare. And I expect and hope their policy makers would laugh at the attempt to analyze medical care as if it were like goods and services sold in a classical economic market. As should everyone who has thought about it much, outside of blinkered ideology.

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