“If You Are Really Sick, Call 911”

Why do many doctors’ offices have answering machines with this initial response? Price controls. Why does it take so long to get an appointment, if one is even available? Price controls. What will happen if our next president, in the name of universal health care, increases third-party responsibility for medical care? More price controls.

United States health care spending is escalating faster than growth in our gross domestic product. This trend, mixed with technological advancement and an aging population distribution, is unsustainable. Our government finances approximately 50 percent of health care spending. The Centers for Medicare and Medicaid Services reported medical spending was more than 16 percent of GDP in 2007. In 10 years it is projected to exceed $4 trillion and comprise nearly 20 percent of GDP. The Medicare trust fund is expected to become insolvent by 2019. As a result, Medicare and Medicaid control prices to restrain spending. Market forces are foregone. Price controls lead to shortages. Quality of care deteriorates, and you have difficulty getting to talk to a nurse or doctor.

This week Congress is debating further cuts to Medicare reimbursement superimposed on annual inflationary erosion of fee schedules. Physicians’ office rent, employee, and other overhead costs continue to increase. They are relying upon answering machines rather than nurses to triage phone calls. Subsequently, access to care is further jeopardized for many Americans. Increasing overhead and liability concerns, in the face of declining reimbursement, lead physicians to decrease availability for the indigent and uninsured. Only half the nation’s doctors are accepting new Medicaid patients because reimbursement is insufficient to cover the costs and inherent risks of providing care. Michigan, where I practice, is expected to face a 12 percent doctor shortage by 2020. National studies reach similar conclusions regarding physician shortfalls. Graduating medical students, with debt up to $200,000, are rationally less likely to consider careers in lower paying primary care specialties.

Medicare price controls and byzantine bureaucracy have resulted in a misallocation of health care resources. Primary care shortage is a perverse outcome. Over two-thirds of health care expenses are influenced by behavioral factors. Two-thirds of US citizens are overweight, twenty percent smoke tobacco, and alcohol consumption is epidemic. (www.cdc.gov/nccdphp) People need their internists, family physicians and pediatricians. They are the most qualified to help patients with preventative health care and chronic disease management. These primary care coaches can help them with expensive health problems potentially under personal control, yet primary care residency positions remain vacant, and emergency rooms are overcrowded.

Some argue that medical care demand is inelastic, the quantity of care demanded is not sufficiently influenced by prices, and increasing consumer responsibility for payment will not curb health care spending. However, much of health care is not emergent. Many patients are sophisticated enough to become informed health care consumers, as they are for other goods and service. Prices effectively allocate scarce resources. Half of the United States population spends very little on health care, while five percent of the population consumes almost half of the total amount. There is opportunity for a more just allocation of the $2 trillion dollars spent, annually, on health care in the United States. The RAND Health Insurance Experiment, completed in 1982, identified considerable price elasticity, wherein some personal financial responsibility for health care did not significantly affect quality of care. (www.rand.org)

Galen institute founder Grace-Marie Turner, (www.galen.org), at this year’s Acton University, prioritized three social justice principles for health care reform: human dignity, subsidiarity, and charity. As humans created in the image of God, we have the responsibility to care for our health. Secondly, care of the poor, vulnerable, and those unable to care for themselves ought to occur at a level of society closest to those in need. Government should be the provider of last resort, not the first. Finally, charity must be sustainable: resources are not unlimited and so in health care as in every other form of charity, it is important to match the available assistance with genuine need.

The common good would be better served by market oriented reforms coupled with compassionate subsidization for the poor and vulnerable, rather than by expanding third-party health care. The American Medical Association proposal for health care reform, which incorporates these precepts, is compelling. (www.voicefortheuninsured.org) Tax law changes could more justly allocate the $120 billion federal tax subsidy for employer-provided health care to provide millions with access to health insurance, and improve family security. Insurance industry reform, including measures increasing inter-state competition, could foster premium affordability. People might take better care of themselves with increased incentives for improving personal health and with the help of primary care physicians.

It will take sound economics working in concert with good intentions to bring about real health care reform that provides more and better access to the people who need it. Government expansion and price controls won’t take us toward that goal.

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  • Claire

    A big reason why the voicemails say this at doctor’s offices is liability.

  • tednkate

    Two real-life stories…

    Way back when, my sister needed to have some blood test done. There was our non-profit-hospital’s lab, which everyone knew about because everyone went there because that was where all the local physicians sent their patients, and then there was the litte, non-hospital-affiliated, for-profit lab that had been in town longer, but everyone forgot about when the hospital brought in its own lab.

    Guess what? I called up the for-profit lab, and they were just begging for business. I mean, you could hear it in the secretary’s voice on the phone. Guess what else? The price for the same test was way cheaper at the for profit lab than the hospital’s lab. The quality of the test would have been the same, since both had to send out blood samples to the same outfit.

    Eventually, the for-profit lab went out of business. LITERALLY, everyone forgot they existed because all the doctors in town sent patients over to the hospital, as the hospital was very aggressive (and had the money for) marketing.

    If you ask the doctos about costs, they really haven’t a clue, so they just do what is most convenient, which is to send people to the places they know about. I once got stuck with a HUGE (really huge!) bill for a blood test at our local hospital’s lab, when if I had known I could have had the same blood test for 1/2 price if I just gone down the road about 30 miles. I mentioned the price at the follow up and my doctor was horrified at how much the price was, especially since the hospital lab didn’t send him the report in a format he found easy to use.

    Second real life story:

    My son has Physical Therapy at a private for profit center. When insurance was not available to me to cover the considerable expense, they were very good about giving me every single discount they could. Guess what though? Once our insurance carrier started covering the bills (really, applying everything to deductible), my out of pocket costs went up. Why? Well, now it was the insurance person at the clinic who had to spend time inputting info into the insurance carrier’s website, and its a real nightmare. Eventually (maybe) I will “get my money back” but goodness.

    I could go on with other stories. I honestly believe we need to get most insurance and the governement out of health care and go back to cash across the barrel.