Thursday, April 26, 2007

Market Controls and Medical Training Part 1: The Introduction

I will come right out and say it. Medical training doesn't remotely resemble a free market. It doesn't even pretend to resemble a free market. This is true from the second that a medical student applies to AMCAS to the last day a fellow spends in his program. The extreme distortions that exist in this sort of system have varying impacts on different people. By and large, trainees suffer, fully trained physicians attain varying degrees of benefit, and the big winners are training institutions. Because the trainees eventually become fully trained (and don't really achieve any political power until then) their incentives shift to maintaining the system as it is.

Let's look at it globally. There has been a systematic attempt to limit the number of spots in medical schools. With a limited supply of training institutions, there was insufficient supply to meet demand. Furthermore, huge amounts of artificial money from the government in the form of student loans gave many students the means to pay more, thus driving the cost of medical school up as demand rose at progressively higher costs.

Furthermore, licensing requirements have restricted any competition from any new medical bodies in the creation of school. Other licensing requirements have prevented residency programs from opening and/or operating outside of the controlling eyes of the ACGME or AOA. This has far reaching impact on medical training.

What does it all mean? High demand coupled with artificially low supply produces shortages. Shortages drive up the price. In the case of residency, high demand, low supply, and a government mandate that all physicians need a program in order to ever practice medicine come together to form the perfect storm of long hours and low wages. Period.

Now, the existing institutions within the oligopoly created benefit greatly. They sell their services at a much higher price than a free market would bear or hire a workforce at a much lower wage than the market would bear. Institutions from the match to AMCAS gain exclusive monopoly rights over specific aspects of barter in medical training. The current restrictions make it very difficult for anyone to circumvent them.

The benefit to trainees however, comes at the end. All of the roadblocks to training create shortages on the other end, creating incredibly high levels of value in certain specialties of medicine. Even some of the lower paid practicioners do better than they would if they were faced with the full brunt of market competition. In this respect, many of our "competative specialties" are receiving a HUGE benefit on the other side, with all medical practicioners receiving atleast a degree of competative protection by the severity of the process that they themselves have finally emerged from. Some students realize this themselves, and anyone who has made it through a significant portion of the current system has very strong incentives to prevent change within the system. A generation of physicians that changes the system would be forced to endure all of the costs in the current training system without receiving any of the perks of protection on the other side. Thus, I don't forsee change anytime soon.

Keep reading the blog. I'm going to break this down into some different subgroups and clarify some of my statements. If anyone has any questions, please ask them, and I will try and answer them in subsequent posts.

Wednesday, April 18, 2007

Politics and the Human Immune System

This post has nothing to do with economics (except in the peripheral sense that everything does). This is a bad political analogy coupled with some philosophy. However, as the author of this blog, I have decided to take liberties. It's my blog, and I can do what I want.

Everything has to defend itself. Sometimes this protection is in numbers, and sometimes this protection occurs as a result of individual action. The defense can be against both internal and external insults. However, everything from the smallest cell to the largest empire employs some method of defense.

In the human body, we have the immune system as the primary player in self-defense, with some peripheral actions by different organ systems. The immune system tries to protect the whole body, while organ systems, such as the kidneys, have mechanisms like autoregulation to protect themselves. In this case, the whole body needs the immune system in order to survive. However, the selfish autoregulation of the kidneys is also important, as the body doesn't do as well without them.

In our industrial society, we have a government that is in charge of protecting everyone. The police protect against internal insults, and the military protects against external insults. Those of you familiar with my highly libertarian views might note that I have never suggested getting rid of these institutions. Someone will have the guns, and It might as well be a group made up of my neighbors. Similarly, we have individual defense models (everything from private gun ownership to lawsuits) in order to protect ourselves individually.

To stretch the analogy even further, the immune system is necessary, but too much of it is a really bad thing. On the extremes, a person can suffer from AIDS or Systemic Lupus Erythematosus. Both are devastating, and a balance needs to be maintained. Similarly, too much government is a bad thing and too little can also be a bad thing. On one extreme, we have a Liberia, and on the other hand we have a Communist Russia. When the defense mechanism becomes self-destructive, it needs to be relieved of some of its duty.

Similarly, it often creates a problem when the defense system tries to move into a realm that isn't defense. As an example, when your immune system goes beyond its usual minor impact on the CV system and creates a systemic inflammation, it often leads to shock. In this case, the defense system has taken over a self-defending system. Rather than protecting it from insults, your immune system is actually trying to control vascular dilation (Okay, so maybe it's not intentional, but you get the point). In this case, the powerful immune system has the guns and the vasculature doesn't stand a chance. The same thing happens when the government moves into the economy.

All of our blood cells come from the same precursors, but they serve vastly different functions. Our Megakaryocytes produce platelets. These are important in early healing. We also produce neutraphils, and these are important in fighting off invaders but very poor at healing. You wouldn't want a neutraphil trying to be a platelet. Things would get worse. Similarly, you wouldn't want the government playing doctor or oil tycoon or philanthropist. The government has a specialized function in defense.

When it comes to defense, this also has to be controlled. At the founding of the US, it was understood that too much government created more problems than it was worth. Much like lupus, when the government starts attacking everything and everybody, it's a bad thing. It needs to be curtailed. As many of my readers are current or future physicians, I urge you to look at what the government does in relationship to how you practice. Are they defending you, or is the current environment in medical care nothing but a raging case of Type III Hypersensitivity.

Okay, terrible analogy and rant over.


Tuesday, April 10, 2007

Medical Missions and Capital Markets

I recently went on a medical mission trip to Managua, Nicaragua. At risk of totally blowing my internet anonymity, I'll admit that this wasn't my first trip to this location. As a veteran missionary, I feel that I may have developed some perspective. This post is going to quickly touch on some salient points that I think are often overlooked in foreign medical missions. This is more of a rant than a well organized post.

The problem in Nicaragua (or India, Malawi, Haiti, etc...) isn't a lack of medicine. The lack of medicine is a symptom. The problem isn't a lack of doctors; heck, Nicaragua has "universal healthcare." The problem is an underdeveloped economy. Let me clarify:

Most of the patients that I saw in Nicaragua live on less than $2/day. The majority of our interventions were minor. We gave out huge amounts of Ibuprofin and Amoxicillin, with the occasional package of iron pills . The first thing one might notice about this, is that all of these things are really cheap. In fact, they probably all cost less than the average american spends on coffee in the morning. Yet, my patients in Nicaragua couldn't afford them. You see, the problem here isn't a lack of access to healthcare; it's a lack of money. All Nicaraguans have access to "healthcare," but this healthcare often lacks even the most basic interventions.

Don't get me wrong, I actually love helping people in Managua. My work there is a selfish endeavor, and I derive a level of pleasure from what I do that probably supercedes what I can give to the people who I am helping. However, I cannot save Nicaragua. The larger organization that I work with is trying to start a long term clinic, but even this is unsustainable without continuous contributions from the outside. It is most definitely not self-sustaining. It can't be. To be self-sustaining, a project has to atleast break even. To break even, someone has to pay. For someone to pay, someone has to earn some money. For people to earn money, there has to be an economy.

In the end, I could probably do more for Nicaraguan healthcare by building a factory or even promoting tourism. A higher income by the average citizen would do far more to create a healthier life than I ever could. A water supply that didn't have parasites, which requires money to maintain, would do more for health than I could even dream of doing. Higher income correlates to higher education, better access to healthcare, and a better quality of life. Until then, I'll continue to go down and catch an occasional emergency in a sea of ignorance and poverty. It's sad, because I know that there is a way to fix it.

Monday, April 09, 2007

The Economics of Residency Part IV: Malpractice

Every surgeon will cut for the first time. Every anasthesiologist or ER doc will perform his first intubation. Every internist will have to make his first solo decision, without having to run his plan by an attending. With all of the negative things that I have said about residency, one of the things that it did traditionally accomplish was allowing new physicians to engage in these sorts of practices in an environment in which backup was available and a wise elder was at most a phone call away. In fact, the whole argument for the necessity of residency stems from the idea that this should be necessary before physicians are independently unleashed on the world. Here's the problem, someone still has to be the first patient.

In the earliest days of yore, when life was simple and residents slept on call, most teaching institutions were charity hospitals. There was no entitlement to healthcare at that time, and residents engaged in a mutually beneficial exchange with the less fortunate. The destitute masses that had flocked to the cities and had no family to take care of them were taken in, given a warm place to stay, and nursed until death or disease resolution. In exchange, they gave their bodies as learning devices for the new crop of physicians. The outcomes might not have always been perfect, but we have to remember that this was a simpler time, and inexperienced decision making probably didn't lead down the same rapid road to death as often as it does today.

In today's world, charity is a lot more convoluted. Between Medicare and Medicaid, many of the former patients are now covered by insurance. Add EMTALA to that, and pretty much everyone has access to some entitled healthcare. In this modern world, there are no more good samaratins. There are only doctors, expected to be 100% correct at all times, expected to take the team approach and take care of patients perfectly. Everyone is a possible malpractice suit. Any mistake could be $1 million. Understandably, this has created an environment where everyone from the hospital CEO to the hall janitor lives in fear of the next subpoena.

In this environment, there is no one more dangerous than the resident. Every step of the way, he has to upgrade his level of responsibility. He has to try new things. For every new procedure or decision, someone is the first patient. This is no more evident anywhere than the surgical specialties, where someone is always the first to go under a new surgeon's knife.

This fear has in many ways defeated the entire purpose of residency. Programs are often afraid to let resident's operate autonomously. They should be, residents are a huge legal liability. It is no coincidence that many people who train in community programs with legal immunity often come out with greater technical skill, even if they often fall short academically of their university trained colleagues. A resident performing scut work is a cheap boon to the hospital, but a resident actually attempting to work autonomously is not just slower, but he is a potential legal disaster for the hospital. Thus, malpractice directly inhibits autonomy of residents. A resident who isn't gaining progressive independence is wasting his time as slave labor, period.

The most telling example of this is in the surgery programs, where many residency graduates will flock into a plethora of fellowships in order to actually get some independent operating experience with backup. Others will work independently for the first time as community physicians. They will have never made their own decisions. They still have to do it for the first time, but they will no longer do it under the protective cover of residency. This of course increases their risk of malpractice, and the cycle of destruction continues. There is never any protection from law suits.

In the charity hospitals of old, resident labor was cheap, and their services were almost given away. This was basic supply and demand economics. A man with no money and a raging appendicitis was willing to take the increased risk of a resident surgeon. He had no choice, it was that or death. The supply and demand curve yielded only training surgeons at the price of free. In today's controlled environment, where everyone gets paid the same for the same procedure, trainees can no longer bargain down their services in order to train. They are just a less experienced doctor at the higher price. No one wants that, and who can blame them?

Residents can't train by selling services at rock bottom prices. At the higher prices, they are still held to the standard of fully trained attendings. They cannot become fully trained without spending time practicing at a lower level of experience. They cannot get this experience without opening up themselves and the hospital to huge liabilities. Ah well, bring on the malpractice suits.