Cost Containment That Relies on Less Government Power, Not More

On January 20, New York Times quoted President Obama, trying to rescue his health bill, stressing the need for “some kind of cost containment because if we don’t, then our budgets are going to blow up…” Ironically, if the President had read an adjourning article in the same newspaper he would have found the answer to his quest under the heading: “Should surgeons meet patients Online?”

The article describes Board-certified surgeons populating a website, onto which prospective patients upload photos of body parts which they believe would benefit from surgery. Surgeons nationwide reply with explanations of procedures and price estimates. If patients then decide to proceed, they travel to the surgeon’s office for a consultation and, in many cases, undergo the procedure.

These surgeons, of course, are cosmetic surgeons, who work directly for their cash-paying patients — not insurance companies or the government. The result of direct payment is that, even though the variety of cosmetic procedures has exploded over the years, prices for cosmetic surgery rose at about half the rate of consumer prices, from 1992 through 2005. Prices for medical services — most of which are paid for by insurers or government — rose almost twice as fast as consumer prices.

The New York Times equivocates about the benefits of this innovation, because the price might go up a little after the surgeon sees a patient in person, and because providing an internet consultation across state borders often violates state licensing laws. But these state licensing laws are also an unnecessary interference in the freedom of patients and physicians to have consultations via “telemedicine.” Seeing a doctor in person is becoming increasingly difficult, and face-to-face consultations are often curtailed. (That’s why regulations on telemedicine that restrict doctors’ and patients’ ability to engage across state lines are a measurement in the U.S. Index of Health Ownership).

I recently attended a presentation by David Goldhill, a businessman who wrote a compelling indictment of the U.S. health care system. Mr. Goldhill described U.S. health care as on an island, separated from the mainland by a body of water which nobody can cross. “In what other sector of American life,” he asked rhetorically, “do we fear technological innovation, accusing it of driving up costs, reducing quality, and limiting access?”

Only on the health care “island” do policy-makers hold such an absurd belief, passing laws and regulations preventing people from using devices like telephones and high-speed Internet in the pursuit of medical services. Cosmetic surgery is a narrow bridge from the health care island to the real-world mainland. If President Obama really wants to contain costs and increase access, he should take a walk across that bridge.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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