Can Economics Save Medicine?

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First, in a certain sense medicine in America is broken. Doctors and patients are unhappy, the quality of care deteriorates, and costs keep increasing. Even before covid, US life expectancy declined three years running. Even before covid, too many Americans were sick, depressed, fat, and unhappy with their physical and mental health. I wonder if we’ll ever have accurate data about undiagnosed and untreated cancer and other serious illness as a result of the hospital and clinic lockdown. It strikes me this is the kind of information we might want before we consider another lockdown for any reason.

But at the very same time, medicine (broadly speaking) is absolutely poised for incredible entrepreneurial breakthroughs which will revolutionize not only the practice and delivery of medicine, but how we think about health altogether. From cash practices to medi-share programs to medical tourism and drug importation, the future promises huge innovations of the kind our speakers today will discuss—but only if we have the good sense to allow it.

One thing we cannot ignore: doctors are deeply dissatisfied. According to the 2018 Great American Physician Survey, only half of doctors would recommend the profession to young people, and less than half were happy with the direction of the profession. Their biggest complaint? Third-party interference, whether insurance or government and correspondingly a lack of independence. Doctors think they are working harder for less money and less respect.

I’m sure most of us in this room would like to live into our eighties and nineties—and enjoy them in reasonably good health. But our golden years will be full of doctor visits, as anyone with aging parents can attest. Who will be the doctors treating us in those coming decades? Will they be the best and brightest young people? Will they forego tech or Wall Street or some more lucrative profession to spend fourteen hours per day looking at our aged feet or clouding eyes? Who will do this for $150,000 per year, as an HMO employee with little autonomy or status? Who will give up their twenties to medical school when “doctor” loses what’s left of its prestige?

So medicine desperately needs change. But what kind of changes, and decided by whom?

Fiat Medicine versus Market Medicine

It depends on which of two competing visions we accept.

The first vision is political; we’ll call it fiat medicine. “Fiat” means commanded by the government, through legislative decree. We pass laws and people get healthcare, just as we pass laws and people get welfare, housing, education, entitlements, or any kind of government service.

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