Consumer-Focused Medicine In The Late 18th Century

As I’ve said before, I think you can learn a lot about health care economics by looking at health care as practiced before the development of any scientifically valid forms of treating illness. Consider this from Ron Chernow’s Alexander Hamilton:

The big innovation that Stevens is offering here is basically to give his patients a bunch of placebos. This is a huge step forward relative to the conventional wisdom, which prescribes a number of directly harmful measures. Over 200 years later, there’s still no cure for yellow fever. But in the 1790s a fierce debate ended up raging between Stevens and his supporters (most notably Hamilton) and followers of Benjamin Rush who prescribed the traditional cure of bleeding and enemas. And yet of all the treatments on the list, the only one that did anything useful was dosing patients with opium. That doesn’t cure yellow fever, but it is effective pain relief.

Which is all just to say that an account of health care economics needs to account for the persistence, for hundreds of years, of a market in treatments that don’t work. Whether you buy your laptop from Apple or Acer or HP or whatever, they all sell working laptops. Kia, Ford, and Volkswagon all sell cars that drive. Before scientists and engineers developed airplanes that could fly, nobody sold anyone a plane ticket. But health care customers have no way of knowing whether or not the treatments they’re given work. Most sick people recover from illness even if they’re not treated, and many patients die despite being treated correctly. Meanwhile, people feel distressed when ill and derive a sense of psychological relief from being told by an authoritative-looking person that they have the situation in hand. Loved ones have a positive desire to expend resources on distressed family members. Very little about this points in the direction of a “market” in medical care that’s likely to create cost-effective cures for illness.