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Thursday, May 17, 2012

Freedom Attacked by Regulations

Too many laws and regulations are inhibiting to free markets. There is one area of our economy that is flooded with such laws and regulations: medicine. Don't get me wrong, many of these laws are to protect patients, keep our clinics and hospitals as safe as possible, etc. However, the intrusion of government into healthcare has burdened everyone with higher costs and a slower system, as I talked about last week. As a reminder, insurance companies compound the problem by shielding the direct costs to their insurees, except in annually raising premiums.
Let's make a comparison to a profession not yet flooded by government regulations: law. Anyone can go to law school: the nation churns out 7 graduating law students to 1 graduating medical student each year, so it's a flooded market meaning their salaries are depressed on the free market compared to what doctor's pay would be if government didn't interfere. Lawyers can charge what they want, they can charge for emails, phone calls, visits, paperwork - any contact with a client or work for a client. They can bill in 5 minute increments. They don't have government telling them how to do their jobs, though the laws created by government legislators are their business. They have no financial go-between between themselves and their clients. They make an easy six figures as starting lawyers, and many make easy millions once they achieve partner status, not that all lawyers become partner. The latter are figures doctors haven't seen en masse since the '80s. Yes, there are a few cash-only (don't take insurance) physicians at the top of their fields who can still make millions, comparable to law partners, but this is very rare.
Now imagine for a second if doctors could do this sort of thing that lawyers do. Imagine if doctors could bill you directly for phone calls, emails, visits, paperwork, and could bill you directly. It might change how you thought of their services, or sought their services! I'm not saying they should do this, necessarily. But if anyone has a 'right' to earn more for working long hours to help other people by healing them it is doctors. But, no. Lawyers (most legislators are lawyers - some of them multimillionaires from suing doctors, like John Edwards) make sure that their law practices are not burdened by regulations while medicine is, by the same hands.

Instead, doctors see their pay shrinking annually. Right now, the average amount a doctor takes home is about $200k. It's closer to $100k-$120k for family practice physicians, pediatrics, and geriatrics. Under the alterations hiding within Obamacare's changes to Medicare, doctors who use hospitals for their practice can expect to see their pay plummet to $120k on average, working even more hours than they do already with even more bureaucratic hassles.

Doctors, beyond the daily rigors of their practice, have hours of paperwork (or computer work) to comply with state and federal government regulations. This makes for very, very long days. This makes for days that are half uncompensated, because doctors are not paid directly for their work outside of visits with patients. The big resulting change in medicine right now is for doctors to give up their failing private practices (and paperwork responsibilities) to join big groups with secretaries and nurses hired and trained to handle all those sorts of things such as Kaiser and other such hospital groups across the country. You can expect to see more of that. You can expect to see shorter doctor visits. You can expect to see these changes whether or not Obamacare is struck down or repealed, unless or until legislators restore more free market principles to healthcare, as I talked about last week.

Rush Limbaugh talked about the deleterious effect of Obamacare upon insurance companies yesterday, by the way. More backup to what I said last week.

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