Economic Incentives for Reactionary Versus Preventative Medical Care

Samantha Kilpatrick

In producing various goods and services, many consumers seek their own personal benefits weather these be social, spiritual, or economic. However, the good of the consumer must take precedence over this and their desires prioritized. One prominent example of a common producer-consumer is relationship is that of a doctor and patient. Advancements in modern medicine have created growing skepticism in regard to the extent to which medical practitioners place their own benefit and prosperity over that of their patients. In “Abundance and Scarcity”, Frederic Bastiat asserts that, secretly, physicians, like all other providers of goods and services, may be self-serving or antisocial as this may increase their monetary rewards: “in so far as we are producers, it must be admitted, each of us has hopes that are antisocial.”[1]  In some cases, social or general interests are ignored in order for a producer’s individual wealth to accumulate. These selfish hopes are best exemplified through the increased monetary rewards for curing diseases and injuries after they have already occurred compared to that of preventing their development. The large incentives given for reactionary care in the pharmaceutical industry make it difficult for both philosophers such as Bastiat and members of modern society to determine if man’s desire for money and other material goods outweighs the satisfaction derived from sociable action.

Bastiat believes that being a producer causes one to have internal desires which differ from that of a consumer: “take the case of any producer. In what does his immediate self-interest consist? It consists in two things: (1) that the smallest possible number of persons engage in the same kind of labor as he; and (2) that the greatest possible number of persons be in quest of the product of his labor.”1 In the case of a physician, this interest would consist of there being very few other qualified doctors available and large numbers of sick or injured people. The current health care system is highly producer-driven as it seems to favor the wishes of these producers over that of patients they cater to. There are relatively few qualified doctors for given ailments and the lack of efficient and well-regulated preventative precautions create a growing need for cures for large numbers of ill individuals. This benefits doctors as they are able to flourish economically as a result of the high demand for their services.  A consumer-driven health care system would instead focus on retaining the health of an individual and eliminating the need that a high number of people would search for the product of physician’s labor. More diseases would be inhibited and the overall cost of care decreased if health care was more aimed at meeting the needs of the consumers.

Bastiat explores the idea that there are measures which could be taken in order to prevent the contraction of many disease but are not, “we cannot blind ourselves to the fact that certain physical improvements such as better public sanitation, the development of such moral virtues as moderation and temperance, the progress of knowledge to the point at which everyone can take care of his own health, and the discovery of certain simple, easily applied remedies, would be just so many deadly blows struck at our profession.”1If preventative medical care for diseases and injury were improved, the need for doctors trained to care for their occurrences would decrease.  The economic incentives for treating a patient once a disease has been contracted or injury done outweighs that of preventing their initial occurrences. As suggested by the Brookings institution, health care should instead aim at providing preventative help for consumers. Darrel West suggests the implementation of a “Preventive Medicine Fund that covers gym memberships, exercise equipment, flu shots, diet advice, smoking cessation programs, and substance abuse treatment.”[2]  Implementing these strategies would decrease the economic incentives of physicians who thrive off of their ability to perform reactionary medical treatment such as medications, surgeries, and radiation when health problems occur.

Monetary benefits will be more easily reaped when treating a sick patient than in taking the necessary precautions to ensure they will not have to be treated in the first place. As stated by Jeffrey Levi, associate professor of health policy at George Washington University: “Prevention is the most effective, common-sense way to improve health and reduce health care costs in the United States, but there’s never been a strong national interest in prevention.”[3] Instead of focusing on keeping people in good health, the health care system mainly focuses on addressing problems after they have arisen. The physicians treat ailments to the best of their abilities once they have occurred, but do not place comparatively as much importance on preventing them. They obtain maximum economic benefit from this system as treatment plans are typically more costly than that of prevention care.  For example, mammograms are a common imaging technology used to screen women for breast cancer. Having a mammogram costs an average of around $100 for uninsured individuals. This initial cost provides only small monetary rewards compared to that of chemo, radiation, and the multiple surgeries an individual may undergo if they test positively for this cancer: “The estimates of lifetime per-patient costs of breast cancer ranged from $US 20,000 to $US 100,000.”[4]. Thus, from a purely economic standpoint, physicians gain from people refraining to be screened and being diagnosed with chronic illnesses such as cancer after the disease has already begun to metastasize. As their cancer grows, so too does the cost of its treatment. From a purely economic standpoint, physicians have increased economic incentive to treat a disease which has not been detected early on and requires more intense, costly treatment.

Another example of this producer-consumer relationship is seen in vaccinations. Vaccinations are antigenic materials which are administered to a patient in order to aid their immune system to in developing adaptive immunity to certain pathogens. Flu vaccinations are a common vaccination and are administered through shots or sprays. They are a source of large controversy as their efficacy and results are highly debated. The shots or sprays typically cost an average of $35 for uninsured individuals, and may not even fully prevent the contraction of the disease as they are only 50-60% effective. [5]Thus, 40-50% of the individuals who received the vaccination could be expected to develop the flu. These consumers, along with those who did not receive the initial vaccination, are forced to search for treatment options if they become ill. Anti-viral medications such as Tamiflu or Relenza are common treatment choices and run about $100 for a 10-day dose.[6]Big Pharma then profits from consumers initially buying the vaccine, which may or may not be effective, and once again when individuals purchase anti-viral and over the counter medications to combat the illness if contracted.  If the vaccine was more effective, less people who received the vaccine would become ill, and, in turn, need to purchase the expensive treatments. Additionally, if it was administered more frequently, the chances of people contracting the disease would again decrease. This would not be economically beneficially to physicians as they benefit from selling increased amounts of the relatively preventative vaccinations and more of the costly treatments.

Within the current health care system, there are increased economic incentives for producers to treat diseases and injuries once they have occurred rather than stopping their initial occurrences. Making the current flu vaccination sprays and shots more effective and widely use would decrease the need for the more expensive treatment options which must be used once someone falls ill.  Increased numbers of breast cancer screenings would decrease the likelihood that malignancies would further destroy healthy cells and, in turn, require more expensive medical care. While doing these things would be less economically straining for patients, especially the uninsured, these large consumer benefits are often overlooked and placed below that of the producers.  In order to reverse this detrimental relationship between patients and doctors, more economic incentives must be placed on preventative care. Increasing these incentives would make health care cheaper and more widely accessible and benefit the consumers rather than the producers while creating a healthier overall society.

[1] Bastiat, Frederic. “Abundance & Scarcity.” Edited by Bernardo Aparicio. In Ursuline Academy of Dallas.

[2] West, Darrell M. “Customer-Driven Medicine: How to Create a New Health Care System.” Brookings. October 8, 2009. Accessed April 10, 2016. http://www.brookings.edu/research/papers/2009/10/08-mhealth-west.

[3] Levi, Jeffrey. “Will We Have a Health Care System or a Sick Care System? A Tale of Two Futures.” Huffington Post. March 21, 2013. Accessed April 10, 2106. http://www.huffingtonpost.com/jeffrey-levi/health-care_b_2427433.html.

[4] Campbell, Ramsey, SD. “The Costs of Treating Breast Cancer in the US: A Synthesis of Published Evidence.” PubMed.gov. Accessed April 9, 2016. http://www.ncbi.nlm.nih.gov/pubmed/19354340.

[5] “Vaccine Effectiveness- How Well Does the Flu Vaccine Work?” Centers for Disease Control and Prevention. Accessed April 10, 2016. http://www.cdc.gov/flu/about/qa/vaccineeffect.htm.

[6] “Tamiflu Prices, Coupons and Patient Assistance Programs.” Drugs.com. Accessed April 12, 2016. http://www.drugs.com/price-guide/tamiflu.!

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One thought on “Economic Incentives for Reactionary Versus Preventative Medical Care

  1. I agree with the idea that doctors want patients to be sick so that they gain more service and profit for it. As humans it is natural to be selfish and always want more, but where is the line drawn when the doctors are trying to profit economically? I had no thought about this issue before.
    Brigid Brewer

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