My car is making a funny grating sound at low speeds, as if something is rubbing together. We have mechanics in town that we trust and who do good work, so we dropped it off this morning. Despite my faith in the shop, I couldn't help thinking to myself I guarantee they'll find something wrong that a few hundred dollars will fix right up. Not fair of me, but then again they make money when the car requires substantial work -- they have an incentive, in a way, for my car to break down. It's arguably balanced somewhat by the potential for me to switch mechanics if I feel like I'm getting substandard service, but honestly how would I know?
I'm actually a reasonably informed consumer, not because I know jack about cars but because a friend of my wife does, and in the past his advice has matched what the shop suggested. So I have a basis for trusting these guys. But it's not always possible or realistic to get multiple expert opinions. A lot of times you just have to pull out the checkbook and hope it was worth it.
The same sort of dilemma applies to many other fields -- for example, a for-profit hospital has an incentive to find something wrong with you that requires their treatment. There are always counter balancing forces; sometimes you can get a second opinion, or shop around, or with the example above your insurance company might balance (or overbalance!) the tendency to treat unnecessarily by being stingy with coverage. However, the basic principle is clear: in a situation where you pay for somebody to fix something, they have some incentive to find that something broken. If it ain't broke, say it is anyway?
Or, to take this argument to the extreme, break it in a way that will become apparent to the customer down the road, so they will be forced to return for more care. I want to be clear, I'm not suggesting this happens with any real frequency, but it's a possibility built into this manner of doing business.
Consider instead a model where you pay someone to maintain something -- your car, or your health, or whatever. Now it is very much in the interest of the expert to minimize the amount of time and effort they put into fixing problems, so they take more steps to prevent those problems from cropping up (preventative care) and the incentive to "find" problems is removed. One might initially worry that they would then simply ignore problems and pocket the steady income, but the contract could specify that they are financially responsible for whatever problems arise -- sort of adding insurance on top.
In fact plenty of things do work this way -- for example, it is standard to pay for software to be maintained, rather than just "fixed" when something goes wrong (in which case the expert might find a few other things that need fixing... for a fee). Seems to me this makes sense for a lot of situations by aligning goals of the customer and the expert to both desire minimal problems and hence emphasize preventative care. What do you guys think?
__________________________
Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
That's generally what we do at work
we purchase service contracts on exspensive tools. You still run into vendors who will try to screw you by cutting corners and arguing every little detail of the contract.
The problem is when you apply this to health you get into a place where it is sometimes better for the provider to see you dead than to have to maintain long term expensive care.
Ultimately I don't think it is possible to have a well functioning health care system when anyone is making money directly off of the patients. For-profit translates to "conflict of interest".
__________________________I came. I saw. I posted.
Veni, Vidi, Bitchy.
Hmm, yes, that would be a problem
Of course it comes up with cars too -- sometimes it's just time to get a new car. Or whatever other product you're discussing. If only that solution were available with health care.
You could still tweak it by making it expensive to allow someone to die (built in life insurance). But I take your point.
__________________________Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
I don't understand
Doesn't everyone take their car to their mechanic grandfather?
__________________________I'm listening to...
I'm still certain that what motivates me
Is more rewarding than any piece of paper could be -- Dennis Lyxzén
in the end its goodwill
In the end you have to trust goodwill and ethics of the " examiner" whither its a doctor or a mechanic and be an informed user as best you can .
__________________________Sometimes its the patient demanding to be " fixed " without putting in any effort , for example a 300 lb person constantly complaining of back and knee pain and a health team too timid ( or politically correct maybe ) to suggest the obvious solution .......
That being said , I do not believe the obesity epidimic is due to overeating alone ,,, there are many factors involved , high fructose corn syrup etc.
sligowoman
Oh yes, I agree
When I was thinking of writing about this I looked up some stuff on health care and found a piece that said that most Americans who have coverage for preventative care don't bother to use it.
Very true that there are two sides to this.
Also agree on diet. Americans don't eat very healthy food in general, which fits in with the above.
__________________________Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
Update: now with real-world results!
One of the calipers on the back brakes apparently seized and had to be replaced. That plus an oil change for only about $230 =)
__________________________Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
Brendan, I don't know if
Brendan,
I don't know if anyone remembers that HMO stands for Health Maintenance Organization.
I worked in sales & marketing in the HMO industry way back in the early days (for the East Coast, that is), the late 1980s. All HMOs coverered preventive care and used it as a selling point as well as (at least ostensibly) health "maintenance" (prevention of illness) that would, on balance, lower total costs.
Some HMOs, like the one I worked for, used independent phsycians in private practice (rather than phsyicians who were employees at company facilities), and many used primary physicians as gatekeepers: you needed to see your primary doctor (general practitioner or interist) first and get his/her referral (approval) to see a specialist. And some, like the one I worked for, compensated their primary physicians on a "capitation" model: they were paid a fixed amount per patient signed up with them as their primary physician. With a twist: some percentage of this capitation amount was "withheld" until the end of the year, and how much of that "withhold" amound the physician was paid at the end of the year depended on the level (or costs) of referrals to specialists by that primary phsyician. The primary physician was also the one responsible for the preventive care (e.g., annual physical).
Hence, the primary physician had the following (conflicting) incentives:
- Keep the patient healthy so he doesn't need to either come back for many more visits (taking up the primary physician's time) or need to see a specialist. (that's the good incentive)
- Spend as little time as possible with the patient in terms of number of visits and time per visit, since "time is money" (most of these physicians had patients from outside capitated HMOs, so more time means more time to make more money with other patients), and the amount of money the physician will make off that patient is fixed (unless the patient switches to another primary physician within the plan).
- Not refer to specialists, and either treat the patient himself (for better or worse) or just deny the referral to specialist for further treatment, evaluation, whatever.
You can imagine all the pro's and con's, benefits and drawbacks for various parties involved. I'm not saying it's a good or bad model, just pointing out the good and the bad.
Good points
It does seem like the preventative care aspect is somewhat undercut by the save time/money aspect, even though in theory they could go together.
If the company was eventually going to be on the hook for specialist treatment it would seem to make sense to get it while the condition was mild, rather than avoid referral until it was more expensive to treat.
I almost think the way to go in a perfect world would be very frequent visits that would involve only quick checkups. Sort of like how dentists do it -- regular cleaning+checkup that catches any cavities before they get to the point where the tooth is seriously damaged.
I dunno, if you focus in on how any one exchange is structured it makes sense, but then you zoom out and look at the whole picture and things just don't hang together consistently.
__________________________Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
thanks. Regarding the
thanks.
Regarding the economics, preventive care CAN produce net savings, but not necessarily.
To illustrate, take an extreme: Generally healthy people getting a complete physical every day (ouch!) might provide the earliest possible detection of a problem and earliest opportunity for treatement, but it would be awfully expensive and probably result in higher total costs for that group of people vs., say, annual physicals, perhaps with semi-annual quick check-ups.
At the other extreme, zero preventive care ever could quite easily result in higher costs for some group of people.
The above gets into some difficult economic and ethical/moral choices when it comes to questions like how often -- and starting at what age -- health insurance should cover tests such as mammograms and prostate exams.
Sadly enough,
an awful lot of Americans can't afford preventive care, which puts them in a really, really tough position. Some people, especially 20-somethings just starting out, are even choosing to forego health insurance altogether. Now our state has a law requiring everybody to buy health insurance. Neither one is any better than the others. The young 20-somethings who opt to forego health insurance altogether are also putting themselves in a dangerous situation: If a serious illness or injury sends him or her to the hospital, s/he is going to be in over his/her head in debt resulting from hospital bills, possibly never to be able to bail out. Scary indeed.
Regarding the required buying of health insurance: Lots of people are stuck with inadequate /mediocre coverage at best, also putting them at risk.
Some people are opting to only obtain catastrophic health insurance, which would kick in only if a serious illness or injury hits, but preventive care is still the best way to go, if people can do it.
Yes, this is true, although
fortunately there are some types of do-it-yourself preventative care that are low-cost: regular exercise, eating reasonably healthy, and so on. I realize these are easier to do when one is well-off but they are not impossible even on a budget or with limited time.
__________________________Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
Do-it-oneself preventions often go a long way,
but they certainly don't guarantee against serious illness, nor will they prevent someone from ending up in the hospital with a serious injury and, if s/he is without health insurance or inadequately covered, protect him/her from astronomical hospital bills.