Zero-sum medicine

Competition appears to have mixed effects in health care. I’m reading about this topic in an interesting book about medicine in America.

Here is an interesting prediction–more than 20 years ago–as to why the game of health care changed:

Increasingly, the gains of one physician, or group of physicians, will have to come at the expense of other physicians or other providers. In the language of game theory, medical services in the 1980s will become more of a zero-sum game. New physicians…will have to take business away from someone else…

Some responses to competition may benefit patients. Doctors may hold more convenient office hours, make house calls, locate in rural areas, and take more time from their patients as they try to cultivate practice. In short, there may be a shift to greater dependence on patients, as in the nineteenth century.

But a zero-sum situation may also mean increasingly bitter competition among groups of physicians allied with different types of health care plans. It may pit established newcomers, as doctors in some communities close ranks. If they follow a protectionist strategy, established doctors may fight to curtail the spread of HMOs, to deny admitting privileges for younger colleges at local hospitals, and to maintain restrictions on licensing authority and third-party reimbursement for psychologists, optometrists, nurse practitioners, and others competing for medical expenditures.

p. 244, The Social Transformation of American Medicine

The prediction feels eerily accurate to me…

(If you’re interested, the book is written by current Princeton professor Paul Starr. It traces the changes in medical practice from the quaint doctors of the eighteenth century to the multi-millionaire surgeons of the 1980s.)



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  • http://www.numericalexample.com/ numericalexample.com

    I don’t know the situation in the US but this might be true for other countries as well.

    The dutch medical establishment have been very well in limiting the number of doctors and medical students in all stages of their education, for many decades. They have a coalition with the government. The government’s reasoning is that it is cheaper to have few doctors earning high amounts than having many doctors earning much lower salaries.

    This result is that dutch doctor salaries are among the highest in Europe. These health care costs put pressure on the profits of hospitals as well: dutch hospitals have very low profit margins.

  • http://mvallamp.blogspot.com/ Mahesh

    In general compared to other professions, the barrier to entry to become a doctor is usually high and rightfully so. A 4 year degree, a 4 year degree in medicine and a 3 year internship lets you prescribe antibiotics. This does not include additional licensing requirements for each state and sub-categories. Continuing education is mandatory and so on. If you want to be a specialist or a surgeon, you have to put some additonal time.

    In fact, the new health care plan will raise the demand for doctor’s as people who typically have not had access to health care will have access to it.

    All said and done, health care spending as a percentage of GDP is high compared to other nations with no significant benefits or outcomes.

    See the Becker-Posner Blog for this.
    http://www.becker-posner-blog.com/archives/2009/08/

    Mahesh

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