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To Fix Healthcare, Consider Scrapping the Hippocratic Oath

How would we solve medicine if doctors thought more like economists?

Though it has been at the forefront of American political discourse for decades, the fundamental flaws in the economics of America’s healthcare system can only be solved if we undo an oil-and-water philosophical contradiction between two of the oldest institutional bedrocks of the medical profession in America: Health insurance, dating to 1850, and the Hippocratic Oath, which dates back seven centuries.

While rethinking the Oath is radical, we need to rethink the philosophical underpinnings of how healthcare gets transacted as a product in the economic marketplace through the processes of product selection and consumer payment, and insurance and the Oath are at the respective bedrocks of each of these frameworks.

On the payment side, health insurance is a relatively modern invention. Today, it is scrutinized as the primary culprit for healthcare dysfunction, most pointedly the escalating costs that have ballooned healthcare as a segment of the economy, and put it so far out of reach for many families on their own that it has become a government problem.

Health insurance on its own, however, is not a solitary offender. Insurance serves many valuable purposes in life, and in many areas provides a cost-effective way for individuals to mitigate against significant costs for unforeseen events. Good examples include home insurance for unforeseen disasters and car insurance for saving consumers from the otherwise crippling costs that could come in the event of an already traumatic auto accident.

The reason insurance fails in healthcare is its diametrically unusual relationship with healthcare’s bedrock framework of principles for product selection, which trace to the Hippocratic Oath. While the Oath is but a sentimental relic in today’s medical universe, the underlying principles to which it aspires remain the foundation of America’s healthcare system. They set the framework for how doctors view themselves, and also empower the ego and autonomy of doctors across the country.

While some of the Oath’s principles, such as patient privacy and respect for medical best practices, continue to be important, the oath is also underlaid with a bedrock understanding of the doctor’s relationship with the patient that does not comport with health insurance: that of the doctor in an “in loco parentis”, in which the doctor, unlike a salesman, is given both the responsibility and the autonomy to analyze a patient, diagnose him, and treat him based on the doctor’s own understanding of best medical practices, with only affirmative consultation with the patient. Under the Oath, a need for patient care and understanding is explicit, even as the doctor is represented as the primary arbiter of what care is needed.

In layman’s terms, under the oath, the doctor is positioned as an informed expert rather than as a salesman. Under this premise, the doctor is taught to view himself as an actively engaged problem-solver with elite academic expertise beyond the patient’s understanding, while the patient is merely a scientific object. In this way, the Oath positions the doctor more like a parent tasked with taking care of a child than as a salesman offering a voluntary transaction to a fellow adult consumer. Under the Oath, the consumer is given only limited agency to make decisions about his own care, while the doctor holds greater responsibility to what is right by the profession than to the patient's choices.

The overlay between the principle of this oath – which establishes the framework for making decisions about which care products are purchased as being solely in the hands of the doctor – and the principle of insurance – which establishes the principle for how care is paid for as a mostly private relationship between the medical office and your insurance company – creates a double-blind system of care selection and payment pricing for the patient that is uniquely negative in American consumer transactions. By putting the responsibility for both product selection and payment in the hands of a third party, the patient may receive the best care, but he is also merely an object for a doctor to charge as much as they deem appropriate, with few obstacles and little market pressure to keep those costs down.

There are few other areas of a market economy where such a double-blind transaction would be tolerated. In over 90 percent of transactions, the consumer is blind to neither product selection nor payment. Purchasing a stereo at Wal-Mart, for instance, involves full transparency of knowledge by the customer to purchase what they want, and to know how much it costs. While some products blind the customer in one of the two dimensions – in service industries billed hourly like architectural services, for instance, you might hire an architect without knowing the total fee for his drawings, while in some repair industries you might not have a choice to purchase a service even while you can compare estimates with known possible costs before executing – medical services are but a scant handful of areas in which the salesman both prescribes the services that are needed and also sets the prices. In most instances, patients consent to care without ever having asked or been told the cost that doctors will bill their insurance. That the costs never come directly back to the consumer directly disincentivizes such conversations. And many doctors even deny knowing the costs of the services they are providing, as medical education focuses more on the purity of provisioning care. Bookkeeping is a separate profession for medical practices.

The key to fixing health insurance – or healthcare generally – is to disconnect these two discordant phenomena: product selection should never occur by the salesman unless the patient knows the prices; and prices should never be set blindly to the patient unless he is an active participant in the discussion of which ones to purchase. To make medicine an ideal profession, both blind elements would be eliminated. Ideally, medical care would exist more like a menu in a restaurant, with open and transparent discussions between doctor and patient, including a discussion of price, with certifiable estimates available for all options, as well as the ability to check price gauging offices with a period for second opinions or competitive estimates.

Keeping prices out of the discussion of care may reassure some that they're receiving the best advice for their health without confounding variables, but this is not how markets work. Sober as it may be, every area of life involves trade-offs that involve the costs of provisioning safety, and there is no area of life in which we couldn't provide greater safety at greater expense. Continuing to try to do this in medicine will ensure exorbitant costs that cripple consumers. Toward this end, the sentiments of the Oath are both out-of-date and economically naive. Transparency about cost must be a variable moving forward.

As politicians debate whether private companies or government should pay the costs of insurance they are missing medicine’s more fundamental problem: product selection and price setting need to be less opaque. Because the system is bloated, however, solving either end of the equation has no simple solution. While the most obvious answer is bringing the consumer back into the insurance equation more directly as to costs, doctors themselves may also have a role. And it could start with bringing realism to their understanding of their role as a player in a market economy. To do that, though, would require a fundamental rethink of the principles underlying the Hippocratic Oath.

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