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Founding Tension

By Dr. Chris Lillis
. 5 Comment(s)

Tracing our history back to the Revolutionary War and the drafting and adoption of our Constitution, there has always been a tension of ideas resulting in a vigorous debate.  Our revered Founding Fathers had raucous disagreements over the course of nearly four months in their efforts to craft the Constitution of the United States, which has survived the test of time, and provided an example for governance for the rest of the world.

I am not delusional enough to compare myself to one of our Founding Fathers, but I cannot help but see the parallels to the modern day debate in regards to how we lower the health care costs for the nation.  I had the honor of being invited to participate in a debate hosted by the Benjamin Rush Society, and this exercise was instructive in many ways. 

The physicians who belong to the Benjamin Rush Society (BRS) advocate for using the free market to solve the problem of our soaring costs in healthcare.  Ideas like Direct Patient Care (a successful example here), Health Savings Accounts and returning the Practice of Medicine to one where patients pay for their own care – largely eliminating insurance and eliminating the role of the Government almost altogether.  Some of the docs I debated with advocate coupling Direct Patient Care with catastrophic insurance, acknowledging that a 100% cash solution would likely leave many advances of medicine out of reach for a large part of our population – but having patients negotiate for prices (prices that have been made transparent) will allow the principles of the free market to drive prices down.   Transparency in pricing of healthcare is critical to their ideals, as this would lead to a more naturally competitive environment between practices, between hospitals, between drug manufacturers, etc.  Their ideals have merit, and as such, we have had innumerable politicians embrace this free market perspective – you will know they have embraced it when you hear the phrase, “Everyone needs skin in the game.”  Patients, with a more free market, will choose care that is less expensive, just as they would in shopping for a new electronic device.  

One small example of this principle working is in the Medicare Part D program.  Patients are given formularies by their Part D carrier, and those formularies allow a patient some small piece of price transparency through the tiers of medicines in the formulary.  Many of my patients will bring in to my office their formularies in order to work with me to choose generic medicines for them, thereby lowering their copayment and out of pocket costs.  This is a very regular occurrence in my practice, and my patients are very appreciative of reduced costs while preserving clinical value.  It has been postulated that this aspect of the doctor-patient relationship (i.e. finding generics) has helped bring Medicare Part D program costs under what was originally projected, although there are many reasons for this welcome news.     

In our debate, I agreed with my BRS colleagues that we need much greater price transparency in health care to aid cost control.  I agreed that this price transparency would lead to greater patient awareness, and physician awareness, of the cost implications of the decisions we make every day.  I applaud my colleagues at Costs of Care for their mission of bringing cost awareness to clinicians – if doctors truly knew the financial impact of our orders would we make the same decisions?

However, where I disagreed most with my BRS colleagues was the assumption that Health Care is able to function as an ideal free market.   An ideal free market assumes an equilibrium that results from supply and demand, and the competition of suppliers to meet the demands of consumers.  But what an ideal free market requires to reach this equilibrium is symmetry of information between suppliers and consumers as well.

In shopping for a television, I would guess I followed a path that would fit with the ideals of a free market.   I conducted my own research – researched prices of various televisions from different suppliers, their quality reports, customer satisfaction scores, etc.  And weighing the costs and quality I was able to arrive at my decision in a matter of days. 

Imagine the same scenario for a patient.  There is no price transparency in Medicine.  One cannot hop on Google and find “cost of appendectomy” at various hospitals.  There is no quality transparency in Medicine – although we are trying to move in this direction, physicians and policy makers are understandably arguing about how to measure quality at all.  Physician groups traditionally bristle at the idea of public reporting of quality, as an improper measure of quality could ruin the career of a well meaning, otherwise talented physician.  And the assumption of any of this in a medical emergency is obviously a non-starter.  In the middle of chest pain, do we expect patients to research quality scores and search for the lowest cost provider?

Price and quality measures – if transparent and readily available – could move us closer in Medicine towards free market ideals.  However, the practice of medicine, in my opinion, can never reach an ideal free market because of the one variable that will never reach an ideal equilibrium: clinical knowledge.  I spent 4 years in college to learn Biology, and some of the basics of life science.  I spent another 4 years in medical school – just to learn enough to start treating patients.  I then spent 3 years in Internship and Residency in order to be Board Certified in my field of Primary Care.  And I continue to learn more each and every day since completing residency 8 years ago about medical science through reading journals, and attending continuing medical education lectures.   I have invested – as all physicians have – an incredible amount of time into learning in order to know which medicine to choose to treat an ailment, or which test to order to confirm a diagnosis.  I have invested that time to be able to interpret my patients’ symptoms and physical exam findings to arrive at a proper diagnosis.  Patients who are not trained as physicians themselves, or nurses, or other health professional – no matter how intelligent – cannot reach this level of understanding in order to make pure free market decisions about their care. 

An easy example that any physician reading this will understand – just how accurate are the self-diagnoses your patients bring to you after researching their symptoms on Google?  Patients depend on our medical decision making because of the immense asymmetry of information. 

Please don’t assume however, that I am a classic paternalist.  I believe in Patient Centered Care.  I seek, in my interactions with patients, to eliminate (as best I can) that information asymmetry through education.  In teaching my patients about their diagnosis, I hope to empower them to make decisions about their care that actually do conform to free market ideals.  My patients will choose generic medicines if I teach them about generic alternatives and offer choices after explaining Evidence Based Medicine.   They will choose less testing if there is no clinical benefit.  They will choose less invasive care, if it has evidence to support its efficacy.  Nothing trumps my patients’ autonomous decisions about their own care, so long as those decisions are informed ones.  It is my responsibility as their healer to provide that information.

Ironically, to move the Practice of Medicine closer to a free market, there needs to be more readily available information to guide clinicians and patients in their medical decision making.  Panels of experts, such as the proposed Independent Payment Advisory Board (IPAB), are tasked with precisely that: study treatments - their efficacy, their cost - and synthesize massive amounts of information to make more readily available the information we need to make the best decisions in medicine.  This type of panel is exactly what my colleagues at BRS are against – although not because they want to see less information available, but rather a fear of having some bureaucratic panel dictate what treatments physicians prescribe.  Lucky for all of us the IPAB is prohibited from doing so.   

As our Founding Fathers worked out in those four months of debate, compromise is critical so long as it comes from the vigorous exchange of ideas between two poles of an ideological spectrum.  I am always eager to engage in that debate. 

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  1. Katherine Scheirman, MD

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    Another aspect of the "free market" that is not compatible with medicine is the requirement for licensure of all health care providers, thus creating a significant barrier to entry into the market. But really, how many physicians, even the BRS members, would think that getting rid of licensure is a good idea?
  2. Scott Dudgeon

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    A thoughtful paper, Dr. Lillis. A reader analyzing this position from outside the United States is puzzled how Americans from the left or right are obliged to presume the primacy of private enterprise. The principal failing of a free market view of health care is the impossibility of the health care market to behave rationally. Consumers and providers have an information imbalance that militates against rational purchasing, despite Dr. Lillis' best efforts to teach his patients. The proof is in the pudding - the country with the greatest blind faith in the invisible benevolent hand of the market is the country with the poorest bargain in the health care market -- middling outcomes, in equitable access, at a cost far greater than anywhere.

    Cost transparency is not a natural companion of capitalism - the imperative to reduce cost is a struggle everywhere, even in countries where health care is see as a social good. Where ca cost be extracted such that everyone has access to good care? Stop over treating, focus on what's beneficial to patients, promote prevention,self-management - and stop fussing with whether we are practicing 'free market' medicine.
  3. Rebecca Jones MD

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    Great piece, Dr. Lillis. I agree with the prior post that the free market model doesn't really fit medical care. Any system where an individual profits because others are suffering or in need (medicine, prisons, education, justice) cannot base its payment structure on the relationship between "consumer" and "supplier". After all if you are dying of thirst you would pay everything you have for that drink of water. Our biggest task in medicine is to stop this confusion about what patients "really want". What patients really want is to not be patients.
  4. Susan MIller

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    Dr Lillis, Thank you for taking on the myth of the market. Imagine the market working as your comatose body is flown over HIghway 95 on the way to the nearest trauma center. The market does not work at the level of the patient. It is working at the level of the corporations that control most of medicine. There are almost no doctors who have ever set their own remimbusement, most of us have to take what we are given through the negotiations of whoever is doing that for us. It is the profit motive in medicine which is keeping us from moving towards a rational solution. There ARE forces at work while you are being flown to the hosptial. There are only a few regional trauma centers in each state. They had to be licensed, resourced and planned by some rational body. This is the sort of globbal budgeting that could result if physicians would speak out against the nonsense of forcing market decisions onto patients.
  5. Anshu Guleria, MD

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    Very rational and thoughtful discussion, Chris. The free market approach only can work if patients have large financial resources and physicians can openly get paid what we charge. Insurance for health could be like car insurance: high deductibles, limited coverage, and they decide when it's "totaled". The reality is health care has to function like most countries run it: government provided basic and limited coverage for all, private insurance for those who can afford it, and cash payment for those who choose that method (doctors and patients!)
    Doctors can choose which payment model they want to participate in and the govt pays for medical education in exchange for payback working in govt clinics or hospitals.

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