Saturday, August 18, 2012

5% lower quality for 50% lower price?

Healthcare is an area in which Americans are overly obsessed with getting the highest possible quality.  Many technological revolutions have produced new products that were initially at least of lower quality than the good that they replaced, but of much cheaper price.  For example, recorded music is still generally worse than live music, but it is much cheaper.  Mass-produced clothing is worse than custom tailored clothing, but much cheaper.  Many of our plastic consumer goods are a bit less durable, but much cheaper than what our parents used. 
Healthcare innovations are almost never this kind of advancement and that is one reason why technological change produces cost increases in healthcare whereas technological change often reduces costs in other industries. But there are many ways we could use existing technologies and institutions to reduce costs right now.  For example:
1. medical licensing is too strict and we need to expand the supply of doctors, particularly for primary care.
2. Expand the ability of nurse practitioners and physician's assistants to practice medicine independently.  They are much cheaper than doctors, but they charge the same amount because they can only work under the supervision of a doctor who gets the profits from their lower salaries. 
3. Increase telephone and online consultations.  There is telephone and online support for nearly every other industry, so why not in medicine?  It could replace a lot of office visits if doctors would answer questions more readily via telephone. People with low ability to pay for American doctors could even be allowed to use foreign doctors too. 
4.  Use more generic drugs.  We have already done a lot with this. 
5. Allow pharmacists to dispense more drugs without a prescription.  There could be an intermediary step between OTC and prescription in which pharmacists are required to do some basic education and patient screening before despensing medication.  Birth control pills are an excellent candidate for this and they are already available over the counter in most countries in the world. 

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