By John Goodman
National Center for Policy Analysis, October 12, 2011
(Excerpts)
The latest issue of Health Affairs is devoted to racial and ethnic disparities in the consumption of health care. Naturally, they found some. Why are they there?
Let’s consider another necessity: food. Suppose you get a Double Quarter Pounder with cheese and a large order of fries, my favorite fast food indulgence when I put all considerations about healthy eating aside. Do you think your burger would have less cheese if you were a black customer? Would your fries be less crispy if you were Hispanic? Would the meat be less juicy if you earned a poverty level wage?
The answer to these questions is obvious. Just about anybody in America can have the same fast food dinner anyone else in America is having — usually with very little inconvenience. If there is any disparity in this market, it is due solely to individual preference and choice.
So what makes health care different? I am happy to report that increasingly, it isn’t different. MinuteClinics, RediClinics and other walk-in establishments around the country offer standardized services that are comparable to the market for cheeseburgers and fries. In fact, almost one of every five people who got a flu shot last year got it at a supermarket or a drugstore. At a walk-in clinic, your flu shot costs the same as my flu shot. Your allergy prescription is just as inexpensive and just as accessible as mine. If there is any difference between us it is solely due to differences in needs and preferences. Nothing more.
****
Without looking at any empirical data, economic theory alone predicts that if minimum wage laws and other labor market restrictions create a labor surplus, the black unemployment rate will be greater than the white unemployment rate. If policies that promote first-dollar coverage create a shortage of medical care, economic theory alone would predict that unmet needs will be greater among black patients than among whites.
If the demand for medical care exceeds the supply, for example, providers can discriminate based on racial, ethnic or sexual preferences and not pay a price for doing so.
For the entire article:
http://healthblog.ncpa.org/why-are-there-disparities-in-health-care-because-its-free/
Comments on the Goodman blog:
Don McCanne says:
There are a great number of complex variables that result in disparities in health care, and efforts should be made to reduce the impact of all of them. Perhaps the easiest measure would be to reduce financial barriers that result in disparities by providing first dollar coverage for everyone.
Central planning would also be important to ensure adequate health care facilities in low-income regions – areas that do not tend to be attractive to private providers of health care services.
Perhaps the biggest challenge would be to reverse trickle-up economics so that every household can maintain a decent standard of living, as much as is humanly possible.
And…
Uwe Reinhardt says:
I think John is on to something here.
If white and non-white Americans get the same Big Macs in the free market place, they would get the same CABG’s in a free market place.
I am assuming here that anyone who can afford to pay for a Big Mac can also afford to pay for a CABG out of pocket.
Lest someone on this blog — e.g., Don McCanne — argues that it isn’t so in the real world, let me tell you that I am an economist and thus entitled to make assumptions. Our whole profession depends on it.
Uwe
And…
John Goodman responds to Uwe Reinhardt:
I thought economists were supposed to be able to think abstractly. Do I have to walk through every single medical service and show there is an alternative to nonprice rationing in each case? It appears so.
Okay, let’s take CABGs. One way to allocate them is to make them free and deter access with various forms of nonprice rationing. This is how other countries do it, and it appears to be really bad if you are poor or if you are a racial or ethnic minority.
The other way is to empower patients, make them legitimate consumers and invite providers to compete for their patronage. What I call the casualty model of insurance and what others call reference pricing or value based purchasing gives the patient purchasing power, but leaves the market free to determine prices and realize the benefits of competition.
QED
And…
John Goodman responds to Don McCanne:
First dollar coverage is not the solution. It is the problem. Most people in most countries have first dollar coverage and it does not guarantee access to care. In fact, it impedes access to care.
http://healthblog.ncpa.org/why-are-there-disparities-in-health-care-because-its-free/#comments
Comment:
By Don McCanne, MD
John Goodman promotes himself as being the “Father of Health Savings Accounts.” He has been very influential in spreading the concept that we must “empower patients, make them legitimate consumers and invite providers to compete for their patronage.” This concept has gained traction as we see more health care costs being shifted to patients, especially in the form of higher deductibles for accessing care, and higher premiums so that health consumers will shop for only the insurance that they need.
This exchange on his blog is important because it reveals that this approach is based on ideology under the guise of “economic theory” rather than being based on “empirical data” and health policy science. As Goodman states, “Without looking at any empirical data, economic theory alone predicts…” He then is free to advance his ideology based on his version of economic theory.
Uwe Reinhardt shows that he has Goodman’s number when he states, “… let me tell you that I am an economist and thus entitled to make assumptions. Our whole profession depends on it.”
Although policy wonks might find some humor in this exchange (I did), we are jolted back into reality when we realize the implications of Goodman’s manipulation of economic theory. Disparities in health care produce horrendous health care injustices for the victims. One of the more effective methods of reducing disparities, confirmed by empirical data, is to eliminate financial barriers to care through first dollar coverage. Yet Goodman insists that first dollar coverage “impedes access to care.” The basis for that statement seems to be that it does not fit with his own economic theory of consumer empowerment through bearing the costs of health care.
The tragedy of all of this is that perverse, ideology-based economic theory permeates the Affordable Care Act and has an omnipresence in ongoing political manipulations of our public programs designed to provide health and financial security, especially with the current attack on Medicare, and the continual dismissal of single payer even though it has been proven to be one of the most efficient and effective models of financing health care for everyone.
This is not to say that we don’t have our own ideology. Ours is one of health care justice – providing needed health care for everyone – but we do use empirical health policy science to back up our recommendations.