Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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Providers of Care: CHAPTER SEVEN

Since it's pretty clear the widespread use of health insurance has led to increased healthcare prices, it follows that curtailing insurance will lead to lower prices. Let's repeat that: Health Savings Accounts will lower healthcare prices. In the case of physician fees, downward pressure on prices might be somewhat lessened by whatever price resistance had been successful since the administration of Lyndon Johnson. But at least the medical profession has a long and formal history as a fiduciary, and both the voluntary hospitals and the retail pharmacists have a similar tradition of placing the interests of the patient ahead of their own. Local corner drugstores have essentially disappeared since the chain stores put in an appearance, however, and it's a bad omen for any others with some history of fiduciary behavior. On the other hand, more recent entrants to the third-party world, like nursing homes, therapists, and vendors of medical supplies, have a little tradition of charitable behavior. They can expect a purely commercial response to reduction of insurance, which the more benevolent professions will feel is justified, even to the extent of seeing the others disappear, just as the other professions resisted their inclusion in insurance, in the first place. Most of this infighting will take place far below the surface of the water, and the public may be spared much insight into why the acupuncturist survives or even prospers, while the occupational therapist may not.

The hospitals and doctors will probably have an interesting time together. We have earlier described how DRG suppressed hospital inpatient prices, leading hospitals to emphasize emergency room and outpatient services with some pretty fancy pricing. What's more, to fill up these outpatient areas, an epidemic of purchasing physician practices has been encouraged, not merely by the hospitals, but by the administrative rules of the insurance companies. This trend has been most pronounced in rural areas, and rural areas will probably lead the response when the rules change. A rather alarming town-gown schism has made its appearance, with group practices and university hospitals directly attacking the ability of office physicians to select the hospital or group practice which suits them best. When more control of referrals inevitably reverts to unsalaried and unaffiliated physicians, some of the retaliation may be rather unseemly.

In the long run, it is the patients who will decide the bulk of these little quarrels, and the ultimate loyalty of the patients has not been specially cultivated by the teaching hospitals. In England, the loyalty of patients to the Health Service has been surprising even to the politicians, whereas the physicians have been less than thrilled. In Canada, however, the loyalty of physicians to the system of fee-less practice has been at least as strong as their irritation at its regimentations. That is, the position of Canada is strangely reminiscent of its position in the Revolutionary War, midway between the Mother Country and its rebellious colonies. Whether or not this reflects the same sociological causes, must be left to historians to reflect upon. To the South of us, the same persistence of cultures can be found, but with the prosperous classes demonstrating their understanding of the power of money, and the poor classes affiliating with the position of giveaways in class warfare. In all of these local examples, there is a strange tendency for personal self-interest to have less influence than economists typically would suppose.

It is hard for most people to remember the dilapidated, run-down conditions of American hospitals in 1945. This is usually blamed on the Great Depression or the two great World Wars. But a glance at public buildings of the various eras, or public transportation in the same economic cycles, brings up a different possibility. Perhaps the neglect of the public sector is the default position of democratic societies, only breaking free of it, during periodic episodes of prosperity. Or, conversely, perhaps the default position in everybody's mind, is the condition he noticed in his own childhood.

Originally published: Thursday, November 27, 2014; most-recently modified: Thursday, May 09, 2019