A physician, who read my TCS piece from today on healthcare, just sent me a chilling note:
I read with interest your article in TCS this morning about the role of government in creating a crisis in health services provision. I’m not sure you understand how purposefully Leninist (the worse, the better) the regulators are, but here’s a story, now 25 years old, that makes the point.
I was a young doctor, opening an office in a poor neighborhood of a Northeastern city. Lots of my patients had Medicaid.
My office was physically in a hospital, across the hall from the outpatient department/ER. I was horrified to find that Medicaid paid me $8 for an office visit that cost me $26 to roll out, without any profit for me. I was even more horrified to find that if I walked across the hall and did the same visit in the hospital outpatient department, they would pay the hospital $192.
Being a naive young man, I saw an opportunity to craft a win-win situation (if only Stalin knew). I went downtown to meet with the regulators. "Have I got a deal for you", I said. "You raise my OV to $46. Send all the outpatient visits to me. I make $20 profit/visit, you save $146/visit, my volume goes up so I can stay here and make a nice income, the patients get better care, and the taxpayers make out".
I learned that day that the MOST IMPORTANT THING to Medicaid was to drive me out of business. If they gave me $46, $20 would leave "the system" to buy food for my family, a baseball glove for my son, a sports car, God knows what. If they gave the hospital $192, all of it would stay "in the system" to hire friends of the regulators to interpret the regulations, become community activists, expand the payroll in various ways desired by the state, and, most importantly of all, no one would "profit".
The most important thing this taught me was actually not that they were out to screw me, personally. The most important thing was that they were out to make sure that NO DOCTOR could afford to work anywhere where there were lots of poor people. One or two $8 office visits a week if most of your patients were middle class was no big deal. 70% of your visits losing $18/unit was a very, very big deal.
Well, I’ve moved on (obviously), the patients still have no doctors, and the crisis gets worse.
Which is just how they like it. Everything is proceeding according to plan.
(Chilling, indeed. -Max Borders)