In my initial posts on the power of professional organizations, like the AMA and the Bar, I laid out the general case for
thinking of these organizations as labor unions as well as the some of the
history of this thinking. As I acknowledged at the outset, none of this is particularly new, as people have been talking about these ideas for some time, including Milton Friedman. But for various reasons, this discussion is more timely than ever -- certainly more so than when Friedman was taking the issue up. In this post, I'm going to delve deeper into the AMA, explore what exactly the organization does, and explain why it's important that its power be addressed. First of all, it's generally agreed upon that the US economy is facing some sort of problem when it comes to healthcare. The magnitude of the problem is open to debate, but it's clear that
costs are spiraling and access is dwindling. Those are, of course, closely related, since access wouldn't be dwindling if it weren't getting more expensive to provide it. Even if one doesn't accept that the problem is a full blown crisis, it should still be regarded as a market failure that healthcare services are growing less available. This is exactly the opposite of what typically happens across most industries, as the market, over time, will tend to produce more of a good at ever cheaper prices. Nobody with any experience in tech could fail to understand this phenomenon. The other reason why this is important now has to do with technology. The advance of medical technology is moving rapidly, and it has the potential displace disrupt traditional modes of healthcare delivery.
While it's certainly not the whole problem, doctors are an obvious place to look. At every step of the healthcare process, there's (typically) a doctor bill to be paid. And because of the high hurdle one needs to clear in order to get licensed as a doctor, there hasn't been a whole lot of price erosion over time, as there has for, say, IT workers. This is where the AMA comes in. Officially, the AMA has a number of noble goals that few people could find fault with. Chief among them, it claims it wants to preserve the high quality of the healthcare field for the betterment of the public. Of course, preserving the quality of healthcare involves keeping the barriers to entry to being a doctor as high as possible, which allows them to "keep the quacks out", while conveniently protecting Doctors' comfy profit margins. This is done through a number of means, as the AMA tends to side with any proposal that would obviate the role of non-doctors in the delivery of healthcare. The AMA has routinely pushed back against moves to make certain drugs
available over the counter, for this would remove the doctor as a gatekeeper to medicine. It's also spread FUD about cheap,
walk-in medical clinics that are staffed by nurses, as it claims that these clinics could undermine the important relationship between a patient and their doctor. That could be part of it; it could also be, as some doctors willingly admit, that walk-in clinics could force doctors to
bring their prices down to compete. Other areas that the AMA has gotten involved in include inserting doctors into various phases of
labwork and testing, and opposing licensing schemes that could foster the expansion of telemedicine. As it is, the patchwork of state-by-state licensing regimes serve as a
legal hurdle to telemedicine, and the AMA seems to be
pretty happy with the status quo. Historically, the AMA has also tried to limit immigrant doctors.
All of these actions point to a fairly consistent pattern, but still, most people can't accept that there's an alternative. The standard thinking goes that without adequate regulatory measures, the industry would quickly be overrun by quacks, imperiling patients everywhere. But there's a reason that most industries, even ones that are barely regulated, don't become lousy with quacks: quackery isn't good business. If you know that your local fruit stand consistently sells rotten plums, you won't go there. Things like word of mouth and the desire to keep one's brand strong force providers into line, or else they'll quickly find themselves out of the market. And seeing as people go out of their way to educate themselves on goods and services a lot less important than healthcare (hence the magazine Consumer Reports), we can only assume that people will take the same measures to learn about the doctors they go to -- actually, this isn't theoretical, as people already investigate doctors before going to them. Ultimately, the quack argument is just a straw man. The goal of letting more people engage in the practice of medicine isn't an endorsement of non-skilled professionals, but an acknowledgment that people could adequately perform certain healthcare functions without years and years of medical school (and enormous student loan debt to pay back). There's strong evidence that for common purposes, trained nurses can provide care
that's equal to doctors in terms of outcome. What's more, it's easy to imagine many healthcare functions that could be delivered by trained technicians. How many years of training does it take to diagnose strep throat and provide an individual with antibiotics? How hard is it to test for a urinary tract infection? With technology, these tasks (will) become even easier, opening up roles for people with rudimentary vocational training. The common objection to this is that these technicians won't know what to do when there's something more serious going on. But then there'd be nothing stopping them from referring a patient to a doctor, in exactly the same way that an ordinary physician will refer a patient to a specialist when something is above their pay grade.
Not only are fears of quacks overrated, there are plenty of reasons to believe in the opposite scenario, that lowering the barriers to entry into the industry would make for a more robust marketplace that better serves patients. Cost is obviously the big one. With more parties competing to offer health services, cost will necessarily fall. By lowering costs, you also start to solve the availability problem, as insurance becomes more affordable. The other way a more competitive environment benefits customers is that providers compete on quality. It's a sure sign of an uncompetitive marketplace when a patient can assume that if they get to the doctors' office on time, they'll have to wait another 90 minutes to get in. In a more competitive scenario, not only would doctors want to avoid wasting their patients' time, but they'd be forced to invest more into their offices. The industry might even become more forthright about things like success rates, which is not something you hear much about today.
To be sure, competitiveness among healthcare providers is just one challenge among several that are facing the industry. The pharmaceutical industry has its own set of headaches. And there are broad public policy debates to be had surrounding care for seniors and other entitlement-related issues. But in light of glaring market failures, it would seem that the AMA, which obviously stands athwart market solutions, is on the wrong side of the problem.
