September 2019

Rick’s Rants: Our Prices Are Too High

EMA 2019 September29 Chapters

  1. Introduction6:43
  2. Ultra Summary24:34
  3. Rick’s Rants: Our Prices Are Too High17:11
  4. Time To Talk A Little Nerdy: Statistical Significance17:48
  5. Reflections of a Skeptic: EBM Part I20:16
  6. Then And Now: Saline vs. Balanced Solutions Again!19:41
  7. Farewell2:02
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Lane S. -

Thank you Dr. Bukata for the important discussion on prices in medicine. I’d like to take this opportunity to respond to a couple of points that were made.

First up is the notion of capitalism and profiteering in healthcare driving up prices. The problem with this theory is that capitalism is based on open markets and competition. Simply put, American healthcare is absolutely not an open market. It is dominated by an elaborate system of price controls and regulations that create severe market distortions, stifle competition, and empower special interests to maintain higher prices. This can be seen when self-pay patients who are outside the protection of price controls are charged massively inflated prices. Other examples are the lobbying efforts of physician groups that use state licensing regulations to limit competition from APPs and other physician alternatives in the name of patient safety (maintenance of income is the real driver). It is also manifested in the SGR that sets arbitrary, inflated prices that are supported by virtually every physician special interest group and have a ripple effect throughout the industry as a basis for charges. Ironically, all of these cost-provoking regulations, market distortions, and unintended consequences are perpetuated it the name of universal access, equality, etc.

Moreover, I disagree the notion that resource consumption is an insignificant factor in healthcare costs. While it’s true that Americans go to the doctor less and may have shorter hospital LOS than other developed countries, Americans consume a ton of expensive technology. This is manifested by very high rates of CT, MRI, and procedure utilization. Compounding the cost effects is the fact that price-controlled populations (Medicare and Medicaid) disproportionately use that technology and high-cost services. This resource utilization is not only significant, it is unsustainable.

Finally, I’d offer a word of caution to those who would use comparisons with other countries as a justification for systemwide changes in America. America is not Europe or Asia and what works for the goose will not work for the gander.


L. Smith

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