Most of us do not know the basics of economics, although we
should. It impacts every one of us every
day that we are alive. Yet, for most of
us, once we get beyond the law of supply and demand, our knowledge of the
subject starts to vaporize. I can't explain fiscal or monetary policy. While I regard economics as a science, it seems that experts routinely
interpret data differently, which confuses beginners like me. What are novices to think when one expert
hails our continued job gains while another laments our anemic recovery?
The Puppeteers
I have a general feel for market forces. If consumer demand for an item rises, then I
will expect to pay more. If I want to
make a purchase at an independent appliance store, then I will expect to pay more in
return for superior customer service. If
the item is manufactured in China, it will likely cost me less as this factory
is not burdened with worker protections, environmental regulation and union
wages.
The above common sense realizations do not compute in the
medical universe. My fees, which I do
not control, are unrelated to supply, demand or quality of the product. Moreover, medical costs are a mysterious enigma
which confound physicians and our patients.
Why does the cost of a simple bandage
for a hospital patient remind us of the defense department’s $400 hammer? Why can’t I, a gastroenterologist, give a
straight answer to the question, ‘how much does a colonoscopy cost?’
Reimbursement strategies in medicine are changing to a system
that will pay physicians and hospitals for the ‘value’ of their service, rather
than the quantity. Like any slogan, it
will sound appealing but will bring forth a bevy of burdens that will create
foreseeable controversies and challenges. Stay tuned.
Let me share an absurd medical economic observation that
occurred a few days prior to this writing.
I received a phone call over the weekend from one of my patients who was
suffering from a recurrence of C difficile (C. diff) infection and needed
antibiotic treatment for this as soon as possible. The drug of choice was Vancomycin
(Vanco). Physicians know that the cost
of this medicine is often prohibitive.
The patient and I made phone calls to area pharmacies in an effort to
find the most affordable option. Let me juxtapose
below results from two different pharmacies.
Pharmacy #1 Pharmacy #2
Vanco Cost $110 $2,500
Okay, my economist friends, explain this discrepancy to me,
if you can. Good luck.
Would it make sense to you if a Big Mac
costs $3 at one McDonalds and $500 at another?
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