From: fehr@ms.uky.edu (Jeff Davis)
Subject: Re: National Health Care
    <1992Aug25.225246.6226@brownfield.glv.com> <92239.150705DGS4@psuvm.psu.edu>
Date: Thu, 27 Aug 1992 12:55:09 GMT
Organization: The Gizmonic Institute

In article <92239.150705DGS4@psuvm.psu.edu> <DGS4@psuvm.psu.edu> writes:
>In article <1992Aug25.225246.6226@brownfield.glv.com>, brownfield!jbrow (Jim
>Brownfield) says:
>>
>>In article <1992Aug24.112847.26346@ms.uky.edu> fehr@ms.uky.edu (Jeff Davis)
>>writes:
>>> The reform of health care in this country shouldn't be limited to the
>>> ways of paying for the care which doctors and hospitals provide. A
>>> more democratic, lower cost way of providing for decent care could be
>>> achieved by opening up the process of providing care to permit more
>>> care givers. Nurse practitioners, for example.
>>>
>>
>>I couldn't agree more.  Breaking up the established medical monopoly that the
>>AMA (and the federal government -- without which no monopoly could exist) has
>>over us would go a LONG way toward solving the problem of high medical costs.
>
>Nonsense.  The monopoly influence that physicians have arises from the fact
>that quality medical care is encouraged by long-term relationships.  That
>makes patients very price-insensitive and quite unwilling to switch to a new
>provider.  While increased alternatives for primary care will make demand
>curves more elastic, it's unlikely to have "go a LONG way" towards solving
>the cost problems.  Note that the number of physicians has grown enormously
>in the last two decades, as have the number of physician extenders and the
>responsibilities associated with those extenders.  Despite this influence,
>costs have been rising faster, not slower.
>
>In fact, some economic research suggests that this would happen (i.e. increased
>competition would exacerbate cost increases).  This can happen if the
>physician acts as an imperfect agent for the patient or if competition raises
>the information costs of searching for a physician, resulting in less elastic
>demand for each physician's services.
>
>Because of the numerous complications in health care markets, the simple rules
>of economics (competition results in lower prices) do not always hold.

1) I agree that the supply of alternate providers has not stemmed the
   rise in cost, but (I believe) that is in large measure due to the
   fact that most of these have to operate as an adjunct to a physicians
   office. Not much of a monopoly busting maneuver.  

2) Long term relationships between patient-physician is not so long term
   anymore: HMOs and the recent competition among insurance providers
   (many of which constrict the insureds choice of physician) have 
   disrupted that for lots of folks.

3) Opening up the number of providers shouldn't be seen as the only
   attempt at making health care affordable. Reform the tort system,  
   mandate a certain number of years for physicians to devote to public 
   service to repay society's large up front subsidy to their education, 
   simplifying insurance paperwork (not trivial), return to pre-Reagan
   levels of support of pre-natal care for the poor (It's amazing what
   a good start will do to lower health care demands later in life), and
   other non-"socialistic" remedies. Biggest reform of all: recognition
   that we are a society with obligations to each other.

-- 
Jeff Davis <davis@keats.ca.uky.edu> Write when you get the chance. 
Newsgroups: talk.politics.misc,alt.activism,misc.headlines,sci.econ