A fascinating article [$] in today’s Wall Street Journal reveals that Massachusetts residents wait an average of seven weeks for an appointment with a primary-care physician. The queues apparently have nothing to do with the new Massachusetts health plan — aside from illustrating that a paper guarantee of “health coverage” does not necessarily translate into health care:

What?! You mean universal coverage is not universal coverage? Never! Next you’ll be telling me people in single-payer system have to wait for cancer surgery!

Anyway, he then goes into the reasons we have long primary care waits, something a little too sophisticated for Michael Moore. He talks about licensing - a subtle swipe at the AMA’s government-assisted efforts to stop nurses practitioners from becoming primary care providers. But there’s also this, quoted from the WSJ:

The limited number of endocrine specialists is a not a consequence of limited demand — everyone is aware of the epidemic of diabetes we are facing. There are also shortages of generalists and other specialists, and the reason is the absence of market signals — i.e., market-based prices — for influencing the supply of physicians in various specialties…

The essential problem is this. The pricing of medical care in this country is either directly or indirectly dictated by Medicare; and Medicare uses an administrative formula which calculates “appropriate” prices based upon imperfect estimates and fudge factors. Rather than independently calculate prices, private insurers in this country almost universally use Medicare prices as a framework to negotiate payments, generally setting payments for services as a percentage of the Medicare fee structure.

Many if not most administratively determined prices fail to take into consideration supply and demand. Unlike prices set on the market, errors are not self-correcting. That is why, despite an expanding cohort of patients with diabetes, thyroid disease and other endocrine disorders, the number of people entering this field is actually dropping. Young physicians are accurately reading inappropriate price signals.

What they’re talking about is RBRVS - the Resource-Based Relative Value Scale. This is a scheme concocted at Hah-vuhd University in the 1980’s that Medicare, Medicaid and most HMOs now use. It essentially assigns a value to every medical procedure, supposedly taking into account how much it costs to run a practice, and then reimburses based on the region. The pay scale is then calculated for every doctor individually to the nearest penny. Such efficiency is why Medicare has to siphon off 1-3% of the budget to administer the administration.

RBRVS has been a problem from the second Medicare embraced it and I know a number of doctors who dropped out of the AMA because they went along with nonsense. I can get into specifics—how primary care physicians are impoverished because checkups don’t use many “resources”; while heart surgeons do well because their procedures do. But you don’t need to know that. All you need to know is that the market is being dictated by a small panel of “experts” and has had the same happy effects that price-fixing always has.

People forget what a price is: it’s not really a factor of how much it costs to provide a good or service; it’s a way of communicating to the entire nation the supply and demand for a good or service. If demand goes up, prices go up so that more people are drawn to provide the service. By setting prices based on complex (and incorrect) formulae for how many resources are used, RBRVS takes that information out of the system. The price no longer reflects demand and so physicians are not drawn to specialties that are in high demand - they’re drawn to ones that use lots of resources.

Right now, I’m reading The Wisdom of Crowds, a fascinating economics text that talks about how experts can go badly wrong while large groups can find good answers. This is especially true on extremely complicated problems.

Medical care pricing is a perfect illustration of the Wisdom of Crowds—or more accurately, the Doltishness of Experts. In a true free market, primary care physicians could charge more—or nurse practitioners could serve as less expensive alternatives. Either way, wait times would eventually plunge. But in our government-controlled system, the prices are dictated by 29 “experts” and are badly distorting the market.

RBRVS is just one of many many examples of how Medicare directly interferes with the sound practice of medicine. And if Moore and his ilk get their way, there will be no corrective mechanism, none at all. We’ll all be trapped and still waiting seven weeks for an appointment.

The solution to our healthcare crisis is to get the government less involved, not more.