It's an axiom of liberal health care reform, virtually unchallenged, that the health care industry cannot be analyzed like other consumer industries because the demand for health care, to quote Kenneth Arrow, is "irregular and unpredictable." Furthermore, since the outcome of the delivery of health services may or may not meet the consumer's expectations (no matter how skilled the doctor, the patient might still die,) there is an additional cost in the form of the risk associated with any physical illness. And the belief that the consumer therefore behaves differently when purchasing health care than he or she behaves in any other market situation, is the reason why liberal health reformers will not associate themselves with reforms that rest on the working of the free market.
I'll say it again: I'm not shilling for the Heritage Foundation. But there's a difference between beliefs and facts. The purpose of this entire blog is to try and dig up as much data as possible on how health care is really delivered in the U.S., in the hopes that a debate about health care reform can go forward based not on beliefs but on objective evidence. And if we are going to understand how the health care industry works, the most important evidence must relate to the behavior of the consumer whose demand for the product - health care - is what drives the entire industry in the first place. What follows over the next several diaries is some of that evidence.
We begin our analysis with the following question: Why do people go to see a doctor? Or to put it in economic terms: What motivates people to become consumers in the health care marketplace? The first bit of data comes from AAFP, the American Academy of Family Physicians and it goes like this:
For every 1,000 Americans~
800 have some type of health symptom
327 consider seeking medical care
217 visit a doctor's office
65 visit an alternate type of caregiver
21 go to hospital outpatient
14 receive home health care
13 go to the emergency room
8 are hospitalized
This data was accumulated in 2001 and I'm still not sure about the methodology for gathering it. So I'm presenting this data on a tentative basis. On the other hand, from a comparison with other data sets I can say that the data is not only meaningful in terms of its validity, but probably has not changed significantly in the intervening 11 years. That being said, what does this data tell us about the "unpredictable" nature of consumer demand for health care? What it means is that while we cannot predict the onset of illness symptoms the way we can predict the onset of hunger symptoms (by not eating,) this does not, ipso facto, mean that we lose our freedom of choice as health care consumers. As Bill Clinton recently said, do the arithmetic.
If 800 people (out of every thousand) had symptoms and 251 ended up going to see a doctor or went to hospital outpatient or the ER, this means that a great majority of potential health care consumers opted to do something other than seek medical services from a physician. And of the 251 who actually did end up in a doctor's office or a doctor's examining room in a hospital, we don't know if they went the moment they felt the symptom, or the next day, or the next week, or whenever.
We also do not yet know why they went to the doctor, although I will be presenting data on that issue shortly. And obviously, if we do not know the diagnosis of the 251 health care consumers, it would be risky to make any assumptions or conclusions about whether their entrance into the health care marketplace robbed them of the independence that consumers exhibit in other marketplaces. Because bear in mind that the unpredictability argument is not just based the irregularity of health care demand, it also assumes that the unpredictable nature of illness forces consumers to make immediate and uninformed choices because to delay in order to "shop around" might have severe, if not deadly consequences.
In that regard note that of 800 potential health care consumers, only 1% were hospitalized, a figure which is consistent with other data that I have seen, and 2% went to the emergency room, also consistent with other data. Now everyone has a terrible story about someone who died because the emergency room was too crowded, or they got turned away, or they were misdiagnosed. I'm not trying to deny the impact of these tragedies on the people involved, both the patients and their families. But a story about a health care catastrophe visited on one individual, even if everyone knows such a story, simply doesn't prove anything about the workings of the health care marketplace, unless everyone who went to the ER ended up in the morgue.
The one thing we can say is that the definition of health care demand not just as unpredictable but, as a result of its unpredictability, not allowing the health care consumer free choice in deciding whether and how to enter the health care marketplace, is not borne out by this data. It may be true for the 2% of potential consumers who went to the ER, although we will soon publish data that disproves this as well. It may also be true for the 1% who were hospitalized. But it's not necessarily true for anyone else.