Paul Krugman on How to Keep the Doctor-Patient Relationship Sacred: Less Commercialism, More Bureaucratic Oversight

Is nothing sacred anymore? Paul Krugman is worried, very worried about the way people speak about medicine.

How did it become normal, or for that matter even acceptable, to refer to medical patients as "consumers"? The relationship between patient and doctor used to be considered something special, almost sacred. Now politicians and supposed reformers talk about the act of receiving care as if it were no different from a commercial transaction, like buying a car — and their only complaint is that it isn't commercial enough.

Sacred, eh? Maybe Krugman's doctor had an altar installed in his waiting room, but I don't think that's terribly common. It does, however, tell us something about the quasi-mystical way he wants to see medicine, in which bureaucratic expert-priests inform a compliant laity about what's best for everyone.

Why is Krugman so horrified at the notion that medicine be treated as a "commercial transaction?" Is it because medicine is sometimes needed to live—or to live a happier, healthier, more productive life? Maybe so, but if that's the case, then why isn't he worried about the crass commercialism of the grocery store and for-profit food markets? Or does Krugman maintain a special, sacred relationship with his grocer?

I would also be curious to hear how most doctors serving the American public would feel about the idea that medicine shouldn't be thought of as an economic transaction. Oh sure, it's a specialized craft and the best docs build relationships with their patients. But I don't see too many of them working for free.

Here's what I mean when I talk about medical consumers: Individuals making informed choices about the health services they want—and yes, that also means being informed about their cost. Krugman, of course, thinks this conception of medical markets is terrible because he thinks that when it comes to health care individuals either can't or shouldn't make those choices on their own.

Krugman wants us to believe that he's just following history showing that allowing individuals to act as medical consumers doesn't work: "'Consumer-based' medicine has been a bust everywhere it has been tried," he writes.

The evidence says otherwise: In a 2009 metastudy of high quality research, consumer-driven health plans that paired health savings accounts with high-deductible plans didn't simply lower health spending growth, they produced real savings. They even increased the use of preventive care. Last year, a RAND study of consumer plans found similar savings, but without the clear increase in use of preventive care. The classic RAND study of health insurance, almost universally agreed to be the most robust study into how individuals respond to health insurance, found that increasing cost-sharing—i.e., making consumers (there's that word again!) shoulder a greater share of the expenses and thus giving them an economic stake in the choices made about their medical care—reduced utilization and costs, but "in general had no adverse effects on participant health." Once again, consumer-driven care gives us: cheaper care, no generalized negative effects on health outcomes, and in some instances, greater utilization of preventive services. That's what Krugman calls a bust?

Look, it's obviously true that in some cases—say, when you've just been in a car accident and are being rush to the emergency room—you're not exactly making rational decisions about what treatments to receive. But that's not the only time you need medicine. It's not even most of the time. As Niklas Blanchard points out, non-emergency medicine such as outpatient care, drugs, and devices account for approximately two-thirds of all medical spending in the U.S. In many such cases, individuals can make informed decisions.

Individuals can also be consumers when shopping for insurance plans. The current setup, which pairs heavy government mandates with tax-favored employer-sponsored insurance, makes this difficult. But in a healthier medical marketplace, insurers would be able to design and sell plans to individuals who would make informed choices about what sort of coverage they need or want.

None of this allegedly ugly market-mindedness need spoil the doctor-patient relationship, which can indeed be a valuable part of the practice of medicine. But that's not unique: Great business transactions often run on great relationships (this is why companies with great customer service are so widely loved). It may be special, in some ways, but it's not mystical or sacred. It's a business, not a religion.

It's enough to make you question what Krugman really worships. If we're trying to keep the doctor-patient relationship special and sacred, is the way to do that through the imposition of small panels of bureaucratic experts working for the federal government? Maybe for Krugman, that is the sacred part.