Wednesday, June 3, 2015

Behind The Times

Imagine if you will a small community. In this community live three dudes named Ned, Ted, and Jed. Ned, Ted, and Jed each have a measure of competence in medicine. Ned's the best of the bunch. He graduated at the top of his class at Johns Hopkins and landed himself a prestigious chair at the Mayo Clinic. Ted wasn't quite so good. He always had trouble with written exams, so he washed out before earning his MD. Still, he's got steady hands and keen eye for detail. Jed is a slimeball. Jed got a "medical degree" in the mail from the Universidad de Tierra Bomba, an institution that will send you your very own piece of paper suitable for framing embossed with the word "diploma" for the discount price of $1500 US.

Consider two states of the world.
  1. Under a highly regulated regime, golden boy Ned runs neurosurgery at Mayo, Ted finds work as a chartered accountant, and Jed runs a meat chop shop in a poorly lit dungeon on the wrong side of the tracks.
  2. Under an industry-regulated regime, Ned's still at the Mayo clinic, Jed's can't do any better than making high octane nightmare fuel, but mediocre Ted perhaps can find a way to make a living helping patients in need.
Recall your Bastiat. Ted is the unseen cost of heavy regulation in medical provision. The stated purpose of a medical license is so that we don't have a bunch of Jeds running around sloppily amputating limbs all willy-nilly without the sanction of peers. But a dedicated Jed will flaunt license requirements the same way he'll flaunt basic sanitation. Licensing crowds out Ted, not Jed. And the slack is picked up by Ned. Hence the repeated cries of "there's a desperate shortage of nurses."

Why do I bring this up? Well, click this report from Maryland at your own risk. A botched elective butt surgery ended up fatal for 34 year old Kelly Mayhew. "Mayhew and her mother drove from Maryland to the surgeon’s office, which is a basement apartment in a two-family home in Queens." Classic Jed, right guys?

It'd be facile of me to claim that a more competitive pricing arrangement under eased licensing requirements would have forced this Queens basement surgeon out of business, but perhaps Ms. Mayhew would have reconsidered her choice of health care provider with lower out-of-pocket expenses. On the margin, perhaps it's more ethical to permit intermediate medical provision. And that's what it's all about, right? Ethics in medicine? #ButtGate

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Do you have suggestions on where we could find more examples of this phenomenon?