Grand Rounds, Revisited

We got a lot of good feedback on Grand Rounds. Thanks again to everyone who submitted, and thanks for all the links, kind words, and suggestions since.

The first order of business is to correct a few mistakes. First, the author of Making Light is Teresa Nielsen Hayden, not Teresa Hayden as was stated in the original post. Secondly, the website Medgadget is authored by Michael Ostrovsky, Craig Bradley, Enoch Choi, Victor Shikhman, Pashakarnis, and Gene Ostrovsky. I had originally only credited Craig Bradley, who sent me the link.

Also, in response to Grand Rounds, Chuck Swanson sends a link to his site Med Page Today (registration necessary). This site looks at recent health news and judges the media interpretation. The site is run from the University of Pennsylvania and offers CME credit. In addition, today MedPundit links to two similar sites around the globe: Britain's Behind the Medical Headlines and Australia's Media Doctor.

In response to my post on electronic medical records, Dr. Tony finds someone with an opposite view:

I have read many reports and studies showing how important it is for medical practices to have an electronic medical record (EMR). The Institute of Medicine, in Crossing the Quality Chasm, makes a good case that having integrated electronic records will improve quality of care and decrease the incidence of medical errors. The Federal Government is encouraging physicians to go electronic; money has been allocated to subsidize implementation of electronic record systems. The VA hospital system has in place, what by all accounts, is an excellent EMR system. Kaiser Permanente is going nationwide with its EMR. I have even heard from a colleague that Blue Cross is subsidizing some practices to go to EMR by increasing payments to HMO panels for those practices.

This all sounds great, except for two things. One, implementing a system is quite expensive, on the order of $50- $100 thousand. Subsidies from Blue Cross, for example, apparently amount to only $20 thousand. And, unfortunately, for a small practice such as mine, there are really no significant short term cost savings to be realized with the implementation of an EMR. In addition, medicine is not a true marketplace product; practices cannot pass on the increased cost of starting an EMR to the patient in the form of increased fees. In the long term, however, even small practices benefit from having an EMR. Fewer support staff will be needed, and, most importantly, quality of care to the patient will improve.

The second problem is a more difficult one. There are at present about 1800 different EMR systems on the market. Which do you choose? Which companies providing the product will still be in business 2 years from now? How will all the EMR systems talk to each other? Will we truly have an integrated nationwide network where patient information can transferred from one system to another?

We need to have a coordinated, government led effort to get practices to go electronic. Subsidies need to be allocated on a means tested basis. Clinics that provide care to the indigent need more support than Park Avenue physicians. We also need to establish a uniform standard for EMRs. This was done with the internet through the designation of html as the standard mode of communication. The VA system has been suggested as the model for this standardization. This is a great idea, and government should get all the important players in the private sector together to make this happen.

But Dr. Tony comes down in agreement with me:

If you allow the marketplace to dictate the results, over time a few dominant systems will emerge and will create a standard. Be patient. For Heaven's sake, don't invite the government in.

I had a few problems with Dr. Henochowicz's post. 1) He complains that the health marketplace is not a true market where costs can be passed along to consumers. This is true, in a sense that they can't be directly passed onto fees. However, somebody's gotta pay for them, whether the federal government writes the check or not. And if they do, the costs will be passed along to patients in the form of, not higher fees, but higher taxes (or less government services elsewhere). His way has two disadvantages. First, it's economically more effiecient for EMRs to be paid for by the people who actually benefit from them, not some nebulous collective called "taxpayers."

Secondly, and related, there is no feedback to know if the EMRs are worth what they cost. Even the best things on earth, whatever they are, have prices where they are no longer worth it. EMRs are no different. With a market mechanism, we have a way to find that out. With federal subsidies and regulation, all we have is politicians' assurance that "our money is being spent well" - which, to me, is an assurance that it most definitely is not. Indeed, Henochowicz's concern that private insurance subsidies only cover part of the cost, while apparently suggesting to him that fedral subsidy is necessary, suggests to me that these companies no something we don't, and maybe we should wait for these prices to come down before jumping on board.

2) Henochowicz's concern that the vast array of EMRs will not be able to talk to each other, and that some of the companies may be out of business, is reasonable yet misplaced. The messy mechanism of market discovery is a strength not a weakness. As I stated in the original post, we don't have the knowledge to know what type of EMRs will work best, and how they will need to communicate. One way to ensure a mediocre solution is to have a federal panel of experts make these decisions. The way to ensure that small private practices will get the type of EMRs they want, and not be run over politically by large institutions, health insurers, other powerful parties, and the federal government itself, is for these private practitioners to support free market EMRs.

3) Like Dr. Tony states in his original post, the analogy to the internet is wrong and irrelevent. Likewise, Henochowicz's praise of the VA system is a little off as well. He states that praise for this system is universal, but I think that overstates it somewhat. There are certainly some good things with that system, but I find it overall to be a little better than mediocre (and others I know do to). Just from a standpoint of trying to find information, there is a mess of notes and other "stuff" that can make it hard to find what you're looking for. Also, it would be nice if some information, like drug lists for instance, were provided in a wiki format to see how some things have changedwith the patient over time. I've heard (but not experienced based on my student status) that there are some problems with ordering. Now, these things could be changed certainly, but such changes are much easier with the choice and flexibility provided by the marketplace, not the stasis of federal bureaucracy.

Finally, Dr. Parker responds to both Johnathan and I in our disdain for govennment licensing of health practitioners. Here, first, is Johnathan's post:

Licensing and monopoly privilege have harmed the growth of medicine as a field, lowered the quality of care patients receive, and degraded the working environment for many health care professionals. The primary economic effect of licensing is to artificially limit the supply of a good. There are less physicians practicing medicine than would be without licensing. Though such measures are usually justified for safety reasons, there is no reason licensing cannot be supplied privately as it is in other fields. Greater openness would allow different approaches to medical care to compete with each other, result in a more adequate supply of house staff, and produce better overall patient care.

...Realize that by trying to protect your turf through monopoly privilege, you are hurting yourselves, your future colleagues, and the healthcare of patients.

To which Parker replies (in a copy of an email sent to Neil Boortz):

Let us compare a medical license with the most common license issued by the state, a driver's license. To obtain a driver's license one must pass a test on the rules of the road and pass a driving test. This is done to insure a basic level of competency before one is allowed to possibly endanger one's self and others behind the wheel of a car. To obtain my license to practice medicine I had to provide documentation of my education and training. This was to insure that I had at least gone to medical school and done additional training before I could possibly endanger some poor soul who had become my patient. This is also to insure a basic level of compentency. By requiring licensure, the state fulfills a duty to protect the citizenry against potential harm.

In the paragraph above you advocate the use of private agencies to monitor and provide accreditation of physicians. The danger in this is that, as the cliché states, "Who watches the watchers?". Physicians have the choice to submit to further examination in their field of specialty and become "board certified". Board certification is not required for licensure or for admitting and treating patients in some hospitals. If private agencies are responsible for accrediting physicians then a group of physicians can get together and form a new board or "private agency" who will then sign off on them, even if they cannot become certified by an established specialty board. You can see the potential danger this brings up.

But what about the judgment of the individual? Medicine is very complex and if a physician states he is "certified by the xyz board of specialists" the patient may accept that as adequate. At the least a patient would have to do some research to determine if that is a legitimate accrediting board, or something thrown together by some physicians of dubious credentials. By requiring licensure the state also provides accountability. A physician must meet certain requirements to maintain a license. Patient's may complain to the Board of Medicine and an investigation may be initiated. The physician may have his license revoked or put on probation. A "private agency" may be reluctant to discipline one of its' own (dues-paying) members, and if it did, what would stop the physician from starting up his own "Board of abc specialists"? The civil litigation system would not be a good policeman either, as the physician in question could simply operate without insurance. This would remove the "deep pocket" of the liability underwriter, making the financial benefit of a case minimal.

I agree that some of the professions that require licensure and their boards are a method to limit competition (real estate agents and funeral directors come to mind), but professions that require specialized expertise (physicians, dentists, plumbers, and yes even lawyers) licensure is a method to insure a basic level of education and compentency.

He ends by stating: "So while the system is not perfect, it beats the alternative of caveat emptor." I know that this was a throw away line and not meant to be substituted for his more substantive argument above, but I think at it's foundation it represents a misunderstanding of what people like Wilde, Boortz and I advocate. We think a private system of licensing and certification would be more beneficial to the market place for health pracitioners and health care than the government mandated monopoly that exists, for a variety of reasons. Even taking the above statement at face value, we already have caveat emptor, it's just that there is only one vendor of licensing that the emptor has to caveat.

But Parker's argument didn't rest only on such shaky ground, so I'll respond to the more substantive part as well. The first paragraph analogizes medical licensing to drivers licensing, which ensures "a basic level of competency before one is allowed to possibly endanger one's self and others behind the wheel of a car." But the analogy is missing something - drivers' licenses only are necessary for driving on government roads. The fact that almost all of them are owned by the government is immaterial. Before I was 16, I could drive a vehicle of any sort on private property wihtout a license, so long as the property was my own or I had permission from the property owner. Likewise, I would argue that the government does not have jurisdiction over private property to license the practice of medical science on those premises.

Now, just because one sees harm in the governemnt serving this role does not mean that this role should not be served period. It's just that, as stated before, that private agencies should serve this role. And Parker does try to address this argument with "who watches the watchers." Again, this falls flat becasue the exact same argument could be applied to a government mandated monopoly - indeed to any government service. If the mandate poorly serves health consumers to the benefit of the practitioners, to whom is there left to appeal. There will always be a "last line," the question only becomes: "who should that last line be?"

Lastly, Parker relies on the "complexity of health care" argument and states that while licensure in other areas do represent "rent-seeking" and monopoly control, that the licensing of health professionals "is a method to insure [sic] a basic level of education and compentency." Thus we are back to the original point I made in Grand Rounds: "This may or may not be true, but it is a purely empirical question and cannot simply be assumed." Parker's (and everyone esle's actually) argument is that health professional licensing does increase the quality of care so that patients will be assured not to be under the care of a quack.

S. David Young's The Rule of Experts tries to examine the economic literature to determine whether this is the case. Some of the classical examples include a 1983 FTC study that found no difference in measures of quaity between ophthamologists, optomotrists, and opticians. There is only, of course, a difference in price. A second example sites a law (in multiple states) from the 1980's that required radiology technicians and dental hygenists to become licensed becuase of safety concerns with radiation. Subsequent FDA studies found that there were "no significant differences in levels of radiation exposure; the study was unable to determine whether licensure enhanced or detracted from good radiation practices." There are other examples, in this book and elsewhere, regarding dentistry, physical therapy, podietry, pharmacy, and more.

Now, these are generally framed as arguments for doing away with various licensures completely. It is possible that we have reached the frontier where existing monopoly licensing of health professionals does not sacrifice cost and does in fact ensure quality to where it is worth the price. However, it is hardly obvious to me that 1) this is definitely true, and 2) how competing private licensing agencies could not provide this just as well. Scary possibilities and anecdotes aside, I submit that they can do it better.

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Trent, Thank you for your


Thank you for your thoughtful response to my blog. A few points. First, I am not a collectivist who feels that government always provides the answers. However, I do feel that it is important to be utilitarian; do what works. Government does play a useful role in communication technology. We have a uniform method for using telephones, radio and television, for example. Its all very well and good to have a free market with EMRs. However, in order to achieve the increase in quality care that we want, EMRs at least need to be similar in design and be able to communicate with each other. And, in order for the little guy in medicine to stay competitive, some subsidies will be needed. Medicine is, in large part, a public utility. This needs to be kept in mind. Increased uniformity with EMRs and subsidies will aid in the survival of the private practice of medicine.


Doctor licensing=driver

Doctor licensing=driver licensing. This really does not seem like a good analogy. The government system of licensing does absolutely nothing to keep stupid, careless, reckless, and downright homicidal people off of the roads. Government licensing produced the guy who tried to hit me in a crosswalk last month and drove away laughing. There have also been instances where licenses have been given away in exchange for bribes (another assumption people seem to make about private licensing is that it would be for sale, whereas government licensing would not). While it may have some benefit, it does not make sense to me that government licensing is somehow superior to private licensing, given that we can see the results of government licensing of drivers on the roads every day. I have also never had the impression that state medical board oversight of doctors is all that good. Perhaps others have more knowledge of this area than I do, but I recall that the medical board in my home state (AZ) came under heavy criticism for its reluctance to discipline doctors. If doctors do tend to stick together and protect each other, it does not seem to me that making the medical board a government body would change this tendency. Being open to market pressures might. I understand that you don't trust the market to police doctors. But I don't trust the government to police anybody. What's my alternative?

The driver's license analogy

The driver's license analogy does not fit. An unlicensed doctor can only affect those who choose to see him, the unlicensed driver affects everyone else on the road.

Thanks for the link and the

Thanks for the link and the thoughtful post. I don't think the government can produce a standard as good as what competition in the marketplace would provide. Telephones are standard because AT&T had a monopoly and created a universal system, not because of government involvement. Likewise, television and radio are standard because of the laws of physics, not the laws of the government. That is why our radios work the same as those in other countries, not because of the government.

As Neal Boortz has said frequently, one can think of very few things the government does that would not be better done if left to the marketplace. Better and cheaper, by a longshot.