ANS -- The Psychology of Health Care

Here is an article on how people think about health care and on what to charge for health care.  I don't agree with all of the author's attitudes, but she (he?) raises some interesting questions.  And don't miss the last paragraph.
Find it here:  http://www.theatlantic.com/business/archive/2012/03/the-psychology-of-health-care/254604/  
--Kim

The Psychology of Health Care

By Megan McArdle

Mar 16 2012, 1:09 PM ET 101

Derek Lowe

There's something different, psychologically different, about health care. Debates about reforming the way we get medical treatment (and the ways we pay for it) can get a bit otherworldly (to my mind) if they try to pretend that this difference doesn't exist. Sheer economic and public policy reasoning just doesn't take some very important things into account.

Here's how I put it once: Imagine that if you wanted to buy a car, you were required to first visit a car consultant. This would be an expert who would eventually place your order with a car dealer, after first looking over your transportation needs, your financial status, and other factors. There would, of course, be a fee involved. But no one would be able to order a car on their own. Advertisements for cars would probably look similar to the ones we have today, except there would be a phrase at the end to "Ask your car consultant". Much more advertising and promotion, though, would be directed at the consultants themselves, as you'd figure. A steady stream of representatives from the various automakers would come by, extolling the virtues of the latest models and leaving stacks of glossy literature, DVDs, etc., along with offers of free trips to come by for some test-drives. Probably other incentives, too -- there would be scandals involving payoffs to car consultants for steering their clients to various makes.

A bit too science-fictional? Let's move the analogy over to, say, mortgages. Given the real estate meltdown over the last few years, it wouldn't surprise me much if someone, somewhere, has called for the creation of professional mortgage advisors. Anyone looking to borrow money for a real-estate transaction would be required to go through at least a cursory visit with one. The advisor would look over your finances, explain the different mortgage options out there, making sure that you understood what you were getting into. In fact, the advisor would do more than that - if you didn't meet certain criteria, their professional ethics would not allow them to put you in touch with a lender. Some advisors might be more lenient than others, but you'd have to see one, and have them sign off on your mortgage, before you could legally borrow money. There would, of course, be a fee involved.

Under this system, ads for low interest rates and creative refinances would still be around, but they'd always end with an urgent request to call your mortgage advisor immediately, before the great deal evaporates. And the bulk of the promotion money would, again, surely find its way to trying to influence the mortgage advisors themselves. Lenders would come in with figures showing how few people had defaulted with them, what percentage of the loans in a given market they underwrote, and so on. As gatekeepers in an important industry, the advisors would be much in demand. I'm sure that if a profession like this was created, you'd have to use high explosives to ever remove it from the process.

Enough with the thought experiments. In the world we live in, we trust adult consumers to be able to make decisions about which car to buy. The car companies lose no opportunity to try to make people think about the advantages (both emotional and tangible)  of a new car, and to suggest that it would be easy to purchase one. The car dealers themselves stress the same points, and add more details about how easy they are to deal with. People do get into bad leases or buy more car than they can really afford, but that's considered largely the customer's problem, unless the hard-sell tactics were truly egregious.

And (for now, anyway) we trust adult consumers to be able to decide for themselves if they're ready to buy a house, which houses they might be interested in purchasing, and how they might wish to round up the money to do so. This is a harder decision, since it involves a much greater commitment of time and money than purchasing a car, and there are many more options available. The existence of real estate agents and real estate attorneys show that more people feel the need for and are (more or less) willing to pay for outside assistance in finding, buying, or selling the property itself, but there are as yet no mandatory mortgage agents of the kind I describe above. The financing part is typically left up to the customer.

So we finally come to prescription drugs. Medical care is even more complicated than real estate. You can obtain licenses to sell properties or broker mortgages far more easily and with far less schooling than you need to obtain one to practice medicine, and that's a good thing. You also cannot obtain new medicines, or any drugs for major medical problems, without seeing a doctor first, both to make sure of the problem and to advise on its treatment. And I should make clear that I think that's a good thing, too - I believe that the benefits well outweigh the disadvantages. Consumers - in this area, we use the word "patients" - are free to follow or not follow that medical advice, however, or to shop around until they find a doctor whose opinions they like better (if any exist), but they are not free to purchase and dose themselves (or others) with prescription drugs.

One big difference is, of course, that medicine is a complicated subject. There's a lot to know, and not everyone -- to put it mildly -- is capable and/or willing to learn it. Society (rightly) sends such work to specialists who are ready to make that effort, and we pay them for doing so. But it's not like everyone is willing to leave it to the doctors and pharmacists. The huge number of internet sites giving medical details (real and imaginary) to the public is evidence enough of that.

And that takes us to what, in my mind, is the real issue. The complications of medical science are a difference in degree, but health, an intensely personal category unto itself, is a difference in kind. A person's health affects every aspect of their life, immediately and continuously, in a way that not even the roof over their heads can. Medical issues are unavoidably saturated with thoughts (and fears) of death or grave disability, and always have been. This has receded in places as medical science has reduced the incidence of some causes of death, but this emotional entanglement is very much with us, and will be for a very long time. Look closely, and you'll see it: as mentioned above, we have a whole special word for "customer of a physician", because we don't usually think of the relationship in business terms. "Patient" connotes someone who is in the care of someone else, whose fate rests partly or wholly in another's hands. There's no special word for "customer of a car dealer", or "customer of a real-estate agent".

The unusual quality of a medical transaction is understandable for another reason as well, since traditionally the course of a physical ailment has been uncertain, and the ability of medicine to do anything about it has been likewise in doubt. For most of human history, seeing a doctor has been very much like seeing a priest. It has not been looked at as a business deal, and in most cases it had no hope of ever being one in the usual sense. That's because there wasn't much, in the end, that doctors could do for people. See Lewis Thomas's The Youngest Science for more on that - he points out that almost everything his physician father prescribed in the early 1900s was a complicated placebo of one kind or another, and his father well knew it.

There's another factor: as things like clean water, vaccination, and better nutrition have taken hold, the experience of the average person of death from disease has changed. It's safe to say that encounters with death (and ill health) used to be much more common and immediate, for people of all age groups, than is now the case in the industrialized societies. This has led, I think, to a growing assumption that good health is the default state of humankind, and when something goes wrong, it is (a) someone or something's fault and (b) is expected to be remedied, and as quickly as possible.
 
The personal and emotional importance of disease (and of its treatment) leads to behavior that is seen less often in other activities. People will spend terrifying amounts of their own money in the hopes of helping themselves or close family members, even in cases where the probability of success is tiny. Huge sums are spent in this country on people who are clearly near death. A person who would never dream of taking their savings to the racetrack and betting it all on a 50-to-1 longshot horse will take the same amount and put it down on a 500-to-1 chance of a successful medical treatment. This changed attitude extends further: medical personnel are often paid well for their efforts, but they can also give a great deal of themselves in the process, since lives are at stake. There's an urgency, a justifiable sense of importance, which is hard for people in other professions to feel as often or as intensely. Part of becoming a competent physician is learning how to deal with this constructively: it can energize a person, but it can ruin them, too.

So medicine will probably always be special - at least, I don't see that changing in the lifetime of anyone reading this. That complicates things, though, since (like it or not) money is involved. How could it not be? In fact, I'd say that this is one of the most obvious grinding points of friction between the worlds of private emotion and of commerce. Many people find the whole idea of medicine for profit unappealing and somehow unseemly. Since this is an area where altruism is more common (and more easily recognized) than usual, the contrast between selfless sacrifice and self-interested capitalism is especially disconcerting. As a drug company researcher, one of the attitudes I see most frequently among the general public is "How dare you charge so much for medicine!"

But the value people place on effective medical care, and the difficulties of discovering and providing it, ensures that large amounts of money will always be involved. Medical care works better than it used to, and it has reached that state through vast efforts, which deserve to be compensated. If they hadn't been compensated, it's unlikely that the efforts would have been quite so vast. It's true that when money changes hands for medical care, it can be an evil sign, as when charlatans cynically exploit desperate people with snake-oil cancer treatments that they know to be worthless. But it doesn't have to be like that. We all work for a living; money does not have to stain every single thing it touches. Physicians deserve to be paid for their work, in proportion to its value and difficulty, and to their skills in performing it. And drug companies should be paid for their efforts in discovering new drugs, also according to their value.

Not even the harshest critic of the industry would balk at that last statement, but that's because we haven't come down to numbers yet. The level of payment that people think is appropriate varies rather widely. If you believe, for example, that virtually all the work of drug discovery is done through federal funding, with the drug industry stepping in at the end to decide on the price and the packaging, then you will feel that this compensation should be rather minimal. (If you think that, you're mistaken, but that's another topic, and one that's come up here before).

How, then, to decide how much a given drug therapy is worth? Any economist will tell you that the price of some good is, finally, what people are willing to pay for it. This principle works silently, for the most part, until someone offers to resell tickets for the big game for five times what they paid for them, or when the price of lumber and gasoline goes up after a hurricane comes through. At such points it stops seeming so reasonable to many observers (although nothing has changed, in terms of supply and demand). It also stops looking so reasonable to many people in the case of pharmaceuticals, but this happens under completely normal conditions - no hurricane is necessary. Or perhaps it's because since there are always serious medical problems, it's that the hurricane happens all the time.

My industry, the pharmaceutical business, realizes this. But it's never known quite what to do about it. Pointing out that drug discovery is expensive has been a traditional argument, and it's one that I've made myself man times. But that doesn't address the underlying reasons for the uneasiness. Paying money for health care does not descend to the same mental category as paying money for car repairs just because someone has tried to make a case for the accounting involved. People don't believe the numbers, anyway, but even the most believable numbers in the world would not do the trick, even if people believed them.

Pointing out that these expensive drugs are, in some cases, life-saving therapies (important things, worth the price) is another tactic. That has a better chance of working, because it gets closer to the psychological core of the problem, but in the end it's not effective, either. The more important the treatment, the more involved with matters of life and death it is, the more uneasy people feel about paying market prices. The industry, if it stresses the power and efficacy of its drugs, risks looking like someone charging rent for the use of a fire hydrant while a house is burning down.

Still another tactic is to put a personal face on things - to show testimonials from people whose lives have been saved, or from individual researchers working hard to come up with new treatments. This also has a better chance of addressing the psychology of the problem, but also risks heightening the conflict between matters of emotion and matters of commerce. These appeals are a bid for sympathy, on at least one level, which means that they really can't talk about money. That connection has to be made later, and the mixture is as incompatible as ever.

This is where I should come right out and say that I don't have a solution to this problem. But I think that it's worthwhile to consider why it exists, and where (to my mind) it's coming from. When I read health care schemes that seem to come from the Pure Libertarian Paradise, or the ones from the Pure Communal Egalitarian one, one of the biggest factors that gives them their ethereal glow is that they don't seem to be taking these psychological factors into account. Like many other schemes, they look like they'd work quite well on some other intelligent species than human beings.