Thursday, April 29, 2010

The Maimed Hand of Adam Smith

I am struck by the perversity of medical economics in America.  The passage of ObamaCare has focused the attention of the media on the lack of primary care physicians.  Who is going to take care of millions of new patients?  If the business of medicine followed classic economic principles, this should be a panacea for internists and family docs.  The law of supply and demand should kick in and all these scarce doctors should see their incomes rise exorbitantly as patients seek out their medical skills. 

But because medicine does not follow Adam Smith's economic theories, the exact opposite has happened.  Medicare reimbursements are still under relentless downward pressure.  Everybody wants to be seen by a highly competent doctor but nobody wants to pay for it.  In the meantime the medical fields that work in a competitive economic system are raking it in.  For instance, people are willing to pay cash out of pocket for cosmetic surgery or vision correction surgery.  Is it any wonder plastic surgery and ophthalmology are so highly sought after by medical students?  Maybe more PCP's will realize the futility of chasing after that elusive government dollar and join the concierge medicine movement.  Only when enough doctors drop out of the current self destructive business model will the government wake up and actually pay doctors what they are worth.

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