Monday, April 20, 2009

Bitter Medicine

Yesterday, I experienced an event that no parent wants to go through. My 23-month old daughter was playing, fell over a railing and landed forehead first on a 2-inch rock. Just to alleviate any anxiety, she is fine (or technically, after the bruises, cuts, etc. heal, she will be fine). She was watching her brother run past, leaned over a railing to see better and then fell from a height of about 3.5 feet. After the blood was cleaned up and gunk put upon the wounds, my wife called her father. He’s a medical doctor, but unfortunately he lives in California and not in North Carolina where we live. He recommended that we have a professional to take a look and get a CT scan.

Unfortunately, since it was Sunday and the regular pediatrician’s office was closed, we took her to an urgent care facility. Sadly, they only treat patients 2-years and older. With a 23-month old, we had to go elsewhere. After going to one 24/7 facility–oddly closed–and another place that did not have a working X-ray machine, we ended up going to the Children’s Emergency Room.

The people at the hospital were very friendly and competent. I am very pleased about how we were treated. While we were in the waiting room, it seemed as though there was a whole lot less “emergency” going on than one might expect at the Emergency Room. Someone was there because their child had a fever for about a week. Another was there because the boy was having bowel trouble. His mother stated in a rather non-chalant manner that it was probably something that should be looked at. I agree, but is the emergency room the best place for such an examination?

Now, I can think of several scenarios where these situations could seem much more serious than I inferred. However, the emergency room has limited resources. I think that it should only be used for–surprise, surprise–emergencies! Since the emergency room is not allowed to turn people away, the result is a long line and a lot of waiting. There are obviously priorities, e.g., when trauma patients need immediate attention, but overall, the entire service is clogged by people inappropriately using the emergency room when urgent care or even a regular doctor visit would be more appropriate.

Why are these people doing this? Is it because nothing else is open? Possibly, I don’t know. Is it because some of these parents do not have a primary care pediatrician? Possibly, I don’t know. Is it because they don’t have insurance and the hospital will write-off and/or charge the tax-payer, thus making the cost of the trip to the recipient the price of their time? Again, I don’t know.

However, I do know this: when a good or service is underpriced it will be overused. When a good or service is overused and the price can’t reflect the increased scarcity, non-economic methods of rationing will occur. The most typical form is waiting in line. Other rationing methods are by need, by force, by merit, by some lottery, etc. Each of these ignores the supply-side incentives. As a result, there is little economizing; there is little reason to expand output or production; there is little reason to try harder and take that extra step.

Behold, waiting in line is the future of medical care: it is called socialized medicine and universal coverage. Everywhere it is tried, it is a complete failure. Socialized medicine is characterized as being too expensive and having too few services. Patients in Canada are coming to the US for heart operations. Patients in Europe are flying to Singapore and India for treatment. It has even been reported that the UK has a 10-month wait for its maternity list. The only rational alternative to the “one size fits all,” “sit in a waiting room and hope someone will see you,” government health care is the personalized care one gets from a market.

I fear that too many people are not going to heed the words of economists; and through some combination of false charity, ignorance and greed, we are going to end up with socialized medicine. As H. L. Mencken once said, “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” And that would be some bitter medicine.


Michael Shanklin said...

How people cannot see the long-run unsustainability of central planning and the perverse incentives it creates still boggles my mind. To think that these politicians and bureaucrats that have overconsumed our economy will somehow have the answer is not only immature, it's asinine. In all reality, things are going to get worse before they get better. I fear hyperinflation, not only because of what is done today, but because of the 'help' the government will 'give' us down the road. Great post!

Anonymous said...

Is censorship necessary on this blog? Just curious, it really deters people, especially those who are new and unsure of the political spectrum.

P F Cwik said...

Censorship is a fairly strong word. The comments are moderated because this blog is hosted by the Tillman School of Business at Mount Olive College. MOC is officially affiliated with the Free Will Baptist Church and for this reason we do not want any profanity or vulgarity to be posted. Other than that, any and every civil comment is posted.

Rainey Buscher said...

Many people go to the emergency room for primary care because they have no insurance and by law the hospital cannot turn them away for inability to pay. Many hospitals also get huge tax breaks as they write off tremendous amounts of indigent care each year, in the tens of millions of dollars. Even with the tax breaks the hospitals are loosing money. This is such a common happening that the term "payer mix" is a common term in hospital finance when looking at areas in which to expand.

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