Heath and Care

[Garling Files has been on a little hiatus recently trying to finish up the St George’s Angling Club and I think we may have…more to come there soon.  Also, this last week has also been met with an unfortunate situation that left me experiencing the US healthcare system, though not as a patient, and has generated some quick thoughts.  More consistent posts on other topics to follow…]

A standard transaction in the free market asks two institutions to pass though a single point: price paid by the consumer and product generated from the supplier.  In theory, one is equivalent to the other in every transaction that occurs.  People make rational decisions and they pay exactly what something is worth to them.  I’ll only pay $1.00 for a beer at a corner store but I’ll pay $10.00 for the same beer at a baseball game.  I’ll grumble during the latter, but the purchase was not forced upon me; I paid it.

But this idea falls down in healthcare for two reasons:

1) If you are insured, you don’t pay for the product you’re receiving.

All you want to do is be sure it works.  When a doctor walks in and says you need a second scan on your chest, what can you say other than “okay?”  To come back to the free market analogy, this is like buying a six-pack at the corner store and the counter guy saying, “If you don’t buy a second six-pack, that vagrant outside will attack you as you leave.  But don’t worry, my friend here will pay for 95% of it.”  You’d buy that second six-pack, right?  Now, I am not throwing a blanket question at a doctor’s advice.  That line of thinking is very harmful.  But what I am saying is that a doctor is not as motivated to be cost-effective with their care because they don’t have to be.  Sure there are NCQA measures, but if an MRI means billing another $5K to Blue Cross and protecting against a malpractice suit, they’ll do it, and you won’t question them because you are not paying for it.  It may mean another day in the hospital and not knowing what is going on, but you’ll mostly be happy because it feels like progress is being made.  This is a major reason why our healthcare system is misaligned: We put it on someone else’s tab and since there are no advocates from the insurance company in the waiting room, doctors can say “you need X” and you’ll say “okay, do it.”

2) Unless you are a doctor, you don’t understand the product you’re receiving.

Healthcare is a Hostage Market.  Transactions are based upon crucial information held by the supplier and not easily understood by the consumer, yet the transaction has a very real effect on the consumer’s livelihood.  It’s not different from talking to a mechanic.  “Yeah, you can let the timing belt in the engine go a little longer, Mrs Smith, but the car may explode on the highway.  Your call.”  So even if we were footing the bill on our healthcare, in many cases, we’d still be at the whim of the doctor because the consequences are too high to question.  All sales are final.

I guess after being a quiet observer for a few days, it just seems that for the every-man care of medicine, the actual craft is gone.  Everyone feels like opponents as soon as you walk into a hospital.  I know that not too long ago, doctors really did care about their patients.  They called a day or two later to check on them and it wasn’t because they wanted to catch wind of a potential malpractice suit.  Some doctors still do this; I know.  But the health care system as a whole is now set up to dilute that love from the profession.  Legal action, regulations and the knowledge that someone besides the patient is footing the bill sucks it out.  So now we’re left with a greater sense in a hospital that we are at odds with the doctor, and the insurance company.  All three parties–patient, insurer, physician–have misaligned goals.  It’s like a strange system of checks and balances that got out of whack.

I don’t have a good conclusion or wrap up for this post so I’m going to toss the ball over to The Atlantic and what I thought was an incredibly smart piece on a real solution for American Healthcare.  It is long so give yourself some time, but it is good and written with thoughtful passion, and it ties back to the original free market transaction point.

Click here for the article


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Follow Caleb at www.twitter.com/calebgarling

Caleb Garling lives in San Francisco and wrote The St George’s Angling Club, available at




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