Tag Archives: Economics

The Economics of Mid-Levels

Another old post from The Physician Executive with currency in today’s environment. 


I was once a family physician delivering babies in an East Coast big city.

No, I am not a masochist, I was a family practice residency faculty.

Given the intense turf wars caused by an oversupply of competing specialists, it was an unpleasant environment to work. The concentration of specialty providers in big cities and urban areas poses some problems when it comes to costs. Frequently, one looks to mid-levels as a way of addressing problems in health care. Indeed Physician Assistants and Nurse Practitioners have a potentially important role to play in health care, but where?

Jason Shafrin at the Health Economist takes a look at midwives (included in the ranks of nurse practitioners for most of the latter part of the past century.)

I like midlevel providers like nurse practitioners and physician assistants because of their ability to bolster the ranks of primary care, the main engine of cost containment in health care. They can be invaluable in rural areas where it is difficult to entice specialists, even where there is a critical mass of demand for their services.

On the other hand, Jason’s post appears to be looking at midwives as a less costly alternative to obstetricians. A commenter on my site reminded me of Milton Friedman’s assertion that licensing leads to higher costs without assuring quality. In medicine, we have established a complicated and lengthy licensing process in the secure belief that the alternative was the chaos of snake-oil salesman that populated the United States at the turn of the last century. In other words, there was a compelling societal reason to limit and license people delivering health care.

I’m not sure what we accomplish by looking at mid levels as alternatives to established specialty providers. Moreover, specialists and midwives are equally maldistributed, being over-represented in metropolitan areas, where competition finds a way of increasing costs. Yes, health care acts strangely and higher concentrations of specialists tends to increase costs rather than reduce prices as one would expect.

On the other hand, finding an incentive to better distribute physicians may be a subtle way of improving physician incomes and health outcomes and reduce costs.

I want to make it clear once again, this is not a tirade against nurses or midwives. Nurses have saved my backside too often not to be collaborative and old school midwives working in labor and delivery taught me everything I know about delivering a baby.

I am questioning how we make policy in the face of a web of data and mess of potential starting points from which to approach the data.

Health Care: The Blind Men and the Elephant

From The Physician Executive in August of 2007.

In health care, management and policy are a couple of steps removed from patient care. Physicians and other health care workers have insights that sometimes fall on deaf ears. But this is the era of Babel in health care; I don’t believe we have a common language yet, so we can actually understand what each of us are saying.

Health policy is a large enough field that, as in medicine, specialties are starting to emerge. When I speak with health policy types and health economists, they often see the world through the glasses of their area of interest. I know of an economist who specializes in transplant allocation. Another health economist is a state secretary of health (how rare is it that government hires a real specialist for any post, instead of a politician?) Some people are dedicated to providing care for the poor, other would like to preserve choices and options, which are usually relevant to the wealthiest and most privileged.

These different perspectives yield emphasis by turns on primary care or specialties, ambulatory or hospital care, cognitive versus procedural practitioners… Health wonks are like blind men trying to figure out what an elephant looks like.

Biological organisms are not mechanical, and this has an impact in various aspects of the health system. I recall an Operations Manager who couldn’t understand why the clinical staff didn’t follow medical guidelines the same way his computer staff created patient files. (This represents the mis-application of Six-Sigma to the wrong level of outcomes.) One of the most dynamic classroom discussion I experienced was when a bunch of mid-career professionals tossed around my assertion that “protocols” and “guidelines” are not the same thing. We settled on protocols for processes and guidelines for diagnosis or treatment. It’s too bad that medicine cannot be based entirely on empirical evidence, as an epidemiologist (I think) commenter to this blog asserts.

The complexity of people as biological and social organisms leaves us with so many unknowns, I am amazed at how much information we have that is actually actionable. But health care remains governed by careful judgment informed by some data, to help navigate the unknowns.

Experience can be a fickle teacher. So much of our perceptions are shaped by personal experiences, and then confirmed by the consequent bias. If we have a bad experience a physician, we are looking for confirmation in any trace of behavior of every subsequent interaction. So outliers can begin to distort our opinion of things: the greedy doctor, the uncaring insurance company, the bean-counting administrator, the abusive patient or the ignorant bureaucrat… These people exist for sure, but the vast majority are working stiffs who show up for work and try to do the best they can before getting home to their families and an over-leveraged mortgage.

In all this, it is the emotional context of health care that is the most ignored. The fear and despair that physicians and nurses see is forgotten in epidemiologists’ regressions, economists’ differentials and executives’ spreadsheets. No, the golden age of medicine is gone and good riddance, but something else this way comes and we don’t yet know what it looks like. Let’s just make sure it works for the middle: the normal patients, health care workers and administrators who show up every day and stay for every shift, no matter how terrible the things they see.