Friday, February 18, 2011

The Manhattan Institute's Paul Howard illustrates how Serious Medicine becomes Routine Medicine--and thus becomes both less expensive, and better

As the marquee title of this blog indicates, the emphasis here is on "Serious Medicine"--that is, the medicines and other treatments that make a decisive intervention in the course of an life-threatening or debilitating illness.   Serious Medicine is heroic, the stuff of drama--and a key part of that drama is the mystery as to whether or not Serious Medicine will work in any given instance.   That's not in any way a criticism; in fact, it's praise.  Serious Medicine is the cutting edge.

But there's a second category of medicine, which partially overlaps with Serious Medicine, and is just as important--perhaps even more important.  That second category is what we can call "Routine Medicine."   Routine Medicine has been proven to work--there's no drama, just routine functioning and healing.  Routine Medicine provides the medical "shoulders" on which all doctors and medical professionals stand.

We learned in the 18th century, for example that vitamin C prevents scurvy.  Once the secret was discovered, we learned to take our fruits and vegetables, and our teeth no longer fell out.   Problem solved--like flipping a switch.   And we have been thinking about vitamins, and their benefits, ever since.  In the same vein, if you take iodine and you won't get goiter.  Taking vitamin B9, also known as folic acid, can dramatically reduce spina bifida.  And so on.

Aspirin is another great example of Serious Medicine that evolved into Routine Medicine.   Developed in the 19th century, it was the wonder drug of its time: Serious Medicine.  More recently, we have learned that in addition to easing aches, an aspirin a day can have on heart attacks.  More wonders.   And yet because aspirin is long ago generic, it is cheap.

So we can see the pattern: Each one of these Routine medicines was Serious at one time; that is, until the science was worked out and it became Routine.  That science, of course, was expensive and iffy, but then it was accepted.  Medicine is Serious until it became proven safe and effective, and then it becomes Routine.  In the words of the British mathematician and philosopher Alfred North Whitehead, “Civilization advances by extending the number of important operations which we can perform without thinking of them.”   Yes, we take Routine Medicine for granted, but that's OK, because it creates space for new thinking--even as it provides an enduring platform for future medical progress.

And Routine is cheaper--not a small consideration in this world.   Routine Medicine is not only cheaper because its once-esoteric secrets are widely publicized, mass-produced, and then widely distributed.  In addition, Routine Medicine is cheaper because if it can sold on the competitive open marketplace.   Whereupon the virtuous forces of competition and consumer comprehension--that is, consumers armed with adequate information--will serve to increase efficiencies and drive down prices.

Indeed, driving down the cost of Routine Medicine is an implicit topic of an important new study from the Manhattan Institute's Paul Howard, "Easy Access, Quality Care: The Role for Retail Health Clinics in New York."   As Howard explains, "retail  clinics have the skills and organization to serve as convenient and cost-effective providers of basic health-care services." Provided, that is, "troublesome and unnecessary regulatory barriers are lowered or removed."

So here we see the real beauty of Routine Medicine: Not only has it been proven, long ago, to work, but in addition, it can be produced and sold at commodity-level prices, as people learn to comparison-shop.  Competition works, when consumers are at roughly the same plane of information as the producers--more on that later.  But on the subject of Routine Medicine, Howard is exactly right: If the market is allowed to work, it's a win for everyone but monopolists.

(And thus, we might add, we further see the folly of rationing schemes: The more production of medicine there is, the more the price will ultimately come down; indeed, it is only mass production that makes things both widely available and widely affordable.)

Although Howard confines his argument to New York State--where he calculates that the full utilization of  retail clinics would save $350 million over the next decade--we can readily see that the same free-market idea could be extended to the rest of the country, generating savings in the billions. As Howard puts it:

*Retail clinics offer readily accessible, high-quality care for a relatively limited set of basic health-care ailments ranging from minor skin infections to sore throats and earaches. For the services they offer, quality appears to be at least equal to—and, in some cases, superior to—that offered by other types of providers.

*Total costs (to insurers and patients) of care at retail clinics appear to be significantly lower than those incurred by other types of providers such as physicians’ offices, urgent-care centers, and emergency rooms. Much of the lower cost can be attributed to the lower overhead associated with their retail location and widespread use of less expensive “mid-level” practitioners such as nurse-practitioners to provide care.

*A significant percentage of emergency-room visits could be safely and effectively redirected to retail clinics, saving millions of dollars annually.

*Patients are seeking care at retail clinics for appropriate conditions, and the availability of retail clinics does not seem to be increasing the utilization of such clinics for unnecessary care.

*Patient satisfaction with the care that they obtain at retail clinics is very high.

The whole report, here, is well worth reading, because it shows how market forces can improve public health and consumer welfare.

But we must note that at present, there are limits to the efficacy of the free-market model.   In a nutshell, the free market is only guaranteed to work for Routine Medicine.  For Serious Medicine, other complicating factors enter in, clouding up the promise of free markets.  One such factor is "asymmetric information,"  as Nobel Prize-winning economist Kenneth Arrow demonstrated back in 1963, in a landmark article for the American Economic Review.  If your doctor tells you that you need open-heart surgery, what are you going to do?   You can seek out a second opinion, or even a third, but in most places, the supply of surgeons is relatively finite, and each consultation is, of itself, expensive.   Consumer empowerment is great, but in the case of an arcane subject such as Serious Medicine, consumer enlightenment is not feasible.) 

(As an aside, we might note that you should certainly hope that as you are shopping around, seeking to maximize your welfare, that the doctor is not putting profit-maximization as his or her top priority--that is, volunteering to cut your chest open because he needs the money.  That's where the Hippocratic Oath comes in--a non-market mechanism if there ever was one.  The Hippocratic Oath is not always observed, of course, but the abiding spirit of that Oath, in the minds of most doctors, is what separates and exalts the medical profession from other professions.  Doctors would lose that cachet at their peril, as well as ours.  And in any case, especially in the realm of Serious Medicine, we all--patients and taxpayers alike--need regulatory protection against the fraudulent abuse of that information asymmetry.) 

And besides, returning to your hypothetical open-heart surgery prescription, even if you were to shop around for the best possible price on such surgery, the price still will not be cheap, because it's a complicated procedure with a long recovery time.   Open-heart surgery, we can say, is inherently Serious.  Yes, techniques have improved, but it's always risky, as well as expensive.    

It's hard to see, for example, open-heart surgery ever being seen as "Routine," because even if the operation could be performed entirely by robots, the mere fact that the surgery involves opening someone's chest makes it complicated, subject to medical Murphy's Law. 

And yet more heart treatment has become Routine--because it has evolved into new forms.  The need for open-heart surgery has been obviated in many cases, by newer procedures based on newer technologies--angioplasties and stents, for example.  And these newer procedures come pretty darn close to Routine.  

Two summers ago, former President Bill Clinton, who has had open heart surgery, was hospitalized within chest pains; after a couple stents were implanted, he was released the next morning.  Now that's the power of Routine Medicine.  Clinton's life was immediately better, and compared to major surgery, whatever was spent on him during that less-than-a-day stay was a bargain.   

Down the road somewhere, as those sorts of heart procedures become even more routine, perhaps they, too, could be performed at retail clinics, just as with, say, the Lasik eye procedure.   Indeed, some kinds of surgery, aka laparoscopic or minimally invasive surgery, are becoming more Routine as more and more patients receive them on an out-patient basis,  This is the process of "Routinization" occurring--that is, as the procedure gets easier to do--often with the aid of technology, such as cameras, lasers, and even robots. The more Routine a treatment is, the cheaper it will be.  And, by the way, the treatment will likely be better, as medical science works out the kinks over a "scaleable"population.   Our cell phones, for example are better because they have produced in the billions.   

Once again, we see the pattern: Serious Medicine is inherently the costly preserve of  doctors, medical suites, and hospitals.  And that's why it stays expensive, as argued here.  Routine Medicine, based on equalling out of Arrow's information asymmetry, is out in the market, hopefully, and so it becomes cheaper and better.  

And of course, statin drugs, such as Lipitor and Crestor, are cheaper still.  They have saved millions from costly heart procedures--and even more costly death.   And as statins can be mass produced and as they go generic, the cost of those life-saving pills will eventually fall down to aspirin-like levels.  You can get those Routine Medicines at any pharmacy.   And that's a good thing.

So if your doctor says you need open heart surgery, you have a Serious problem.  But if he says you need to go a blood-thinning statin, you have a Routine problem.   

Routine is good.  As Whitehead reminded us, we live by Routine.  And, as the Manhattan Institute's Howard reminds us, Routine is cheaper.  

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