Jan
http://www.mises.org/fullstory.asp?control=1547
WARNING CORRUPTION OF THE AMA
100 Years of Medical Robbery
by Dale Steinreich
[Posted June 11, 2004]
Our mentor has always been Hippocrates, not Adam Smith --
President of a County Medical Society at an AMA meeting
quoted in the February 16, 1981 issue of the New York Times.
This weekend (June 11-13, 2004), the American Medical
Association (AMA) will celebrate the 100th anniversary of
its Council on Medical Education. The medical establishment
understandably sees the formation of the Council as a good
thing. However, some patients aren't ready to celebrate yet,
and their instincts may be good.
History
The American Medical Association (AMA) was founded in 1847
around two propositions: one, all doctors should have a
"suitable education" and two, a "uniform elevated standard
of requirements for the degree of M.D. should be adopted by
all medical schools in the U.S." [1] In the days of its
founding AMA was much more open--at its conferences and in
its publications--about its real goal: building a government-
enforced monopoly for the purpose of dramatically increasing
physician incomes. It eventually succeeded, becoming the
most formidable labor union on the face of the earth.
AMA's initial drive to increase physician incomes was
motivated by increasing competition from homeopaths (AMA
allopaths use treatments--usually synthetic--that produce
effects different from the diseases being treated while
homeopaths use treatments--usually natural--that produce
effects similar to those of the disease being treated). This
competition did serious damage to the incomes of AMA
allopaths. In the year before AMA's founding, the New York
Journal of Medicine stated that competition with homeopathy
caused "a large pecuniary loss" to allopaths. [2] In the
same issue, the dean of the school of medicine at the
University of Michigan railed against competition because it
made treating sickness "arduous and un-remunerative." [3]
Apart from reversing rapidly declining incomes, allopaths
also wanted to rescue their public reputations, which quite
reasonably suffered given their proficiency in killing
patients through such crude practices as bloodletting
("exsanguination") or mercury injections (poisoning). A few
allopaths desired adulation normally reserved for star
athletes and actors. The Massachusetts Medical Society
opined in 1848 that physicians should be "looked upon by the
mass of mankind with a veneration almost superstitious." [4]
Shut 'em Down
The curse of medical education is the excessive number of
schools--Abraham Flexner, 1910.
To accomplish the twin goals of artificially elevated
incomes and worship by patients, AMA formulated a two-
pronged strategy for the labor market for physicians. First,
use the coercive power of the state to limit the practices
of physician competitors such as homeopaths, pharmacists,
midwives, nurses, and later, chiropractors. [5] [6] Second,
significantly restrict entrance to the profession by
restricting the number of approved medical schools in
operation and thus the number of students admitted to those
approved schools yearly. [7]
AMA created its Council on Medical Education in 1904 with
the goal of shutting down more than half of all medical
schools in existence. (This is the Council having its 100th
anniversary celebrated in Chicago this weekend.) In six
years the Council managed to close down 35 schools and its
secretary N.P. Colwell engineered what came to be known as
the Flexner Report of 1910. The Report was supposedly
written by Abraham Flexner, the former owner of a bankrupt
prep school who was neither a doctor nor a recognized
authority on medical education. Years later Flexner admitted
that he knew little about medicine or how to differentiate
between different qualities of medical education.
Regardless, state medical boards used the Report as a basis
for closing 25 medical schools in three years and reducing
the number of students by 50% at remaining schools.
Since AMA's creation of the Council a century ago, the U.S.
population (75 million in 1900, 288 million in 2002) has
increased in size by 284%, yet the number of medical schools
has declined by 26% to 123.[8] [9] In terms of admissions
limits, the peak year for applicants at U.S. schools was
1996 at 47,000 applications with a limit of 16,500 accepted.
[10] This works out to roughly 64% of applications rejected.
[11] On a micro level, for the last six years the University
of Alabama (hardly a beacon of prestige in the medical
discipline) has averaged about 1,498 applicants per year
with an average of about 194 accepted. This is about an 87%
rejection rate. The sizes of the entering classes have been
of course even smaller, averaging about 161.
AMA would likely argue that there's nothing necessarily
wrong with very high rejection rates. This is correct,
except for the fact that these rates are being applied to
pools of candidates who are cream-of-the-crop in quality and
have put themselves through a very costly admissions
process. [12] Current admissions practices could still be
justified by what Milton Friedman (1982, p.
153) refers to as a "Cadillac standard." (Getting away from
the pop-culture anachronisms of the 1960s, let's say
"Lexus standard" a la the government decides that every
driver today deserves nothing less than Lexus quality.)
Applied to health care, the benefits of a Lexus
standard could supposedly offset the costs of rejecting
many ostensibly qualified applicants.
Quality
The first problem with asserting the existence of a Lexus
standard in health care from very stringent admissions
policies are the contradictions introduced
found that at a sample of six medical schools, more than
3,500 white and Asian candidates were not admitted in
spite of having higher undergraduate grades and MCAT
scores than Hispanic and African-American applicants who
were admitted in
undergraduate science professors indicate that it clearly
exists as well. [13]
The second blowout on our shiny Lexus would be the number of
unnecessary/questionable procedures performed on patients
every year. Ex-surgeon Julian Whitaker (1995) tirelessly
rails against the excesses of angioplasty (PTCA),
atherectomy (directional and rotational), and coronary
bypass. [14] Whitaker states that, with few exceptions, all
three procedures for heart-disease patients have been
empirically shown to be utter failures in terms of solving
short-term problems without creating long-term problems
which are much worse.
The first complete study of bypass effectiveness was the
Veterans Administration Cooperative Study [15]. Between 286
patients who received bypass surgery and 310 who did not,
the survival rate at the end of 3 years was 88% for the
bypass group and 87% for the control group. In an 8-year follow-
up to a second VACS study [16] among 181 low-risk patients,
the bypass group had a much higher cumulative mortality rate
(31.2%) compared to the non-surgery group
(154.8%). This was among a group of low-risk patients to
begin with.
A Rand study [17] revealed that nearly 50% of bypass
operations are unnecessary. Whitaker [18] notes that the
number of bypass surgeries since this Rand study, which
should have plummeted, has increased by more than 50%. While
the death rate from heart disease declined from 355 per
100,000 in 1950 to 289 per 100,000 in 1990, the amount of
bypass operations jumped from 21,000 in 1971 to 407,000 in
1991, a increase of more than 1,838%. [19] Whitaker states
that laypersons are quick to attribute increases in life
expectancy to surgery, but the credit clearly belongs to
greater exercise and healthier diets.
Other examples:
180 patients with osteoarthritis of the knee were given
arthroscopic débridement, arthroscopic lavage, or placebo
surgery (skin incisions and simulated débridement). In two
years of follow-up the surgery group reported no less pain
or impaired joint function than the placebo group. Six
placebo patients liked their fake surgery so much they
wanted it performed on their other knee.[20] For other
arthroscopies, knee surgeon Ronald Grelsamer, M.D., states
that at some hospitals doctors are performing as many as
"ten a week [where] nine are unnecessary." [21] Jens Ivar
Brox, M.D., in a Norwegian study compared the effects of
spinal fusion surgery with non-surgical therapy for 64
patients with chronic lower-back pain and disc
degeneration. The non-surgical treatment was as effective
as surgery, but at a fraction of the cost with no
complications.[22] With regard to fusions for lower back
pain, Nortin Halder M.D., stated, "If this were a pill and
I used it, I would probably lose my license and go to
jail." Nevertheless, there are about 125,000 fusion
surgeries a year at $30,000 each bringing back surgeons a
hefty yearly median income of $545,000.[23] Stuart
Spechler, M.D., studied 247 patients with severe acid
reflux in the 1980s and found that surgery was
significantly more effective in improving symptoms than
lifestyle changes and drugs. [24] These results reversed in
the 1990s after the introduction of proton pump inhibitors
(today's Prevacid, Nexium). About 62% of surgery patients
still needed drugs to control reflux and had no less
incidences of esophageal cancer than non-surgery patients.
[25] Mayo Clinic's Yvonne Romero, M.D., is even more
pessimistic, pointing out that in countries where surgery
has been performed longer than the U.S. (e.g., Brazil), as
much as 85% of surgeries fail after 15 years. Says
Spechler, "When you look at data it is hard not to be
biased against surgery." Nevertheless, about 65,000 Nissen
fundoplications are performed each year at a price of
$10,000 each. [26] Hysterectomy (uterus removal) is the
probably the best example of an often unnecessary surgery.
While a necessity for uterine cancer patients, gynecologist
Michael Broder, M.D., found that in a sample of about 500
women, about 70 shouldn't have received the surgery for any
reason whatsoever and about 350 hysterectomies had been
performed without any diagnostic tests to determine if the
surgery was appropriate in the first place. About 70 women
with benign fibroids had their uteruses removed without
first trying drugs or other treatments that could have been
effective. [27]
A final challenge to the Lexus standard is the number of
accidental deaths occurring in U.S. hospitals every year.
Harvard University's Lucian Leape estimated that there are
approximately 120,000 accidental deaths and 1,000,000
injuries in U.S. hospitals every year. [28] To understand
what staggering figures these are, imagine a Boeing 777-200
with its maximum of 328 passengers crashing every day for an
entire year with no survivors. This would add up to 119,720
deaths, still not as many as are killed through medical
error in hospitals every year. UCLA Professor of Medicine
Robert Brook, M.D., told the Associated Press, "The bottom
line is we have a system that is terribly out of control.
It's really a joke to worry about the occasional plane that
goes down when we have thousands of people who are killed in
hospitals every year." [29]
Certainly not all accidental hospital deaths can be
attributed to institutionalized AMA mischief. Errors by
nurses, pharmacists, and sleep-deprived residents play a
role as well. However, there's also no doubt that AMA-backed
restrictions against greater specialization have helped
wreak their havoc over time as well. [30] A later study by
Leape [31] showed that just the presence of a pharmacist on
physician rounds reduced adverse drug reactions from
prescribing errors by 66%. [32] [33] Despite some
shortcomings, the U.S. system still has some of the finest
physicians, surgeons, research, and facilities in the world.
However, the best aspects of the system are due to whatever
vestiges of market freedom still survive, not some illusory
Lexus standard supposedly created by strict statist
controls. [34]
The Exceptional World of the Modern Physician
AMA has built an impressive edifice, one that has completely
insulated physicians from recessionary ("cyclical") and
until recently, technological ("structural") unemployment.
While decade in, decade out, recessions, depressions,
consolidations, and (recently) outsourcing have dislocated
millions of blue-collar, engineering, computer programming,
and middle management employees from jobs and forced
permanent career changes, physicians as a class have been
almost completely immune. Unlike workers in most other
industries, a competent, licensed physician with a clean
record who remains unemployed despite months and months of
search for work is unheard of in the U.S. [35]
Restricting labor supply has markedly boosted incomes.
Median yearly salaries for primary-care physicians are
$153,000, for specialists $275,000. [36] Another more
recent survey across many specialties and 3+ years of
experience makes hospitalists relative paupers of the
profession at $172,000 and spine surgeons at the high end
raking in $670,000.
Restricted supply aside, there's certainly nothing wrong
with competent physicians becoming fabulously wealthy at
their craft and nothing about a free market that would ever
preclude such. Indeed one of the worst transgressions of
current system is allowing the most rude, incompetent, and
stupid physicians
(e.g., Clinton Surgeon General Jocelyn Elders who wanted
public schools to teach first graders how to
masturbate) to earn incomes relatively close to
competent ones.
Of course life is not a complete bowl of cherries for all
physicians. Malpractice insurance premiums for some Ob/Gyns
are now running as high as $160,000 per year. Some Ob/Gyns
have been lucky to have their hospitals pick up the tab.
Others have had to move to different states. No one would
disagree with AMA that paying $160,000 in insurance premiums
is outrageous.
The problem is that AMA's restriction of labor supply has
made the problem worse at the margin than it otherwise would
be. Plus, exactly how does a thoroughly rent-seeking
organization such as AMA lecture malpractice attorneys on
the adverse consequences of wealth redistribution? It can't
with any convincing credibility, thus it has no effective
answer to some in the far Left either, who want to conscript
physicians to provide infinite "free" care to them because
they claim they have a "right" to it.
Robots to the Rescue?
Two recent articles on the Web show two divergent paths the
U.S. health care system can take. A recent story on MSNBC
reflects the worsening status quo. It was a report on a new
robot ("robo-doc") that roams hospital halls visiting
patients in place of a physician (see photos). The robot is
controlled from remote location by a physician. The device
is an obvious implicit attempt to cope with the artificial
scarcity of physicians. Most of the patients, instead of
laughing the pathetic robot out of their wing, thought the
idea was jim dandy. Presumably they couldn't explain how the
armless robot would resuscitate them if their conditions
took a sudden turn for the worse.
On the other hand, the great Ron Paul, M.D., has recently
discussed the trend of cash-only practices which reject all
insurance as well as Medicaid and Medicare. He profiles a
Robert Berry, M.D., who charges only $35 for routine visits.
(This is about half to a third of what I'm typically charged--
with insurance at that--and yet my current doctor, whose
income in one year exceeds what I make in five, is moving to
another practice because she wants more money.) Cash-only
practices of course do nothing to address physician supply,
but some relief is better than none, especially when living
in a clueless American public that thinks robo-docs
represent actual progress in medicine.
A happy 100th birthday to the Council on Medical
Education...and for the sake of all our health, hopefully
not too many more.
________________________
Dale Steinreich, Ph.D., is an adjunct scholar of the Mises
Institute, and contributor to AgainstTheCrowd.com. The
author is indebted to Llewellyn H. Rockwell, Jr., for his
incisive synopsis of AMA history in the June 1994 issue of
Chronicles. Comments by economists L. Aubrey Drewry, Jr.,
Ph.D., Paul A. Cleveland, Ph.D., and Richard O. Beil,
Ph.D., were of great value. dsteinreich@msn.com. Comment
on the Blog.
References Friedman, Milton. Capitalism and Freedom.
University of Chicago, 1982. Langreth, Robert. "Is
Elective Surgery Overdone?" Forbes. 27 Oct. 2003, 247+.
Rockwell, Llewellyn H., Jr. "Medical Control, Medical
Corruption." Chronicles. June 1994, p. 17-20. Starr, Paul.
The Social Transformation of American Medicine. Basic,
1982. Tully, Shawn. "America's Painful Doctor Shortage."
Fortune 16 Nov. 1992, p.
104.Whitaker, Julian. Is Heart Surgery Necessary? What Your
Doctor Won't Tell You. Regnery, 1995. Wolinsky, Howard
and Tom Brune. The Serpent on the Staff: The Unhealthy
Politics of the American Medical Association. Tarcher
Putnam, 1994.
Notes
[105] Rockwell, p.17.
[106] ibid, p. 18.
[107] ibid, p. 18.
[108] ibid, p. 18.
[109] Chiropractors filed an antitrust suit against AMA and
eventually won on August 24, 1987. AMA had dismissed
chiropractic as quackery since at least 1925 and began
an organized effort to shut it down in 1962. See
Wolinsky and Brune, pp. 124, 139-40.
[110] Starr (1982) asserts that it is a myth that allopaths
achieved dominance by crushing homeopaths and
eclectics. He claims that once homeopaths and
eclectics joined forces with allopaths for
occupational licensing and thus began to blur their
distinctions, public approval of homeopaths and
eclectics died.
[111] Friedman (1982, p. 152): "To return to medicine, it is
the provision about graduation from approved schools
that is the most important source of professional
control over entry. The profession has used this
control to limit numbers." Blocking entry is much more
effective than just raising the real price of a
medical license; the "far more important" measure is
"establishing standards for admission and licensure
that make entry so difficult as to discourage young
people from ever trying to get admission" (p. 151).
[112] This actually understates continual declines. Starr
(1982, p. 421) reports that in 1965 only 88 schools
existed meaning that the Council almost reached its
goal of a more than 50% closure of schools.
[113] The 123 AAMC listed schools include the newest at
Florida State University, but not the three med
schools in Puerto Rico. Unlike Puerto Rico, 19 states
are limited to just one school.
[114] Assuming 125 schools at the time, including those in
Puerto Rico. This works out to about 132 new
admissions per school.
[115] Source: John Ross, President of Ross University
Medical School in Domenica, 1997 interview on Westwood
One's Jim Bohannon Show. Here for recent stats.
[116] The admissions process involves sizable application
fees and the Medical College Admission Test (MCAT).
MCAT can, with practically no exceptions, only be
taken twice.
[117] One chemistry instructor at the University of Alabama
told me strictly off the record, "If you're a white
male who is 27 (not the usual 21-23), you're an old
man as far as med-school admissions goes. They won't
take you regardless of how good your GPA or MCAT
looks. You have to go to a Caribbean school or forget
medicine as a career. For white and especially black
women, you can not only have mediocre grades and a
mediocre MCAT, but be as old as 35 and still have a
pretty good chance of getting into a U.S. school. I've
seen it again and again."
[118] Angioplasty involves inflating a small catheter
balloon to clear blocked arteries, atherectomy
clears blockages with blades or burr tips in lieu of
a balloon.
[119] New England Journal of Medicine 311 (1984): 1333-1339.
[120] American Journal of Cardiology 74 (September 1,
1994): 454-58.
[121] Journal of the American Medical Association 260, no. 4
(July 22/29, 1988).
[122] p. 26.
[123] Whitaker, p. 71.
[124] New England Journal of Medicine, July 11, 2002
[125] Langreth, p. 248.
[126] Annual European Congress of Rheumatology, June 20,
2003
[127] Langreth, p. 248.
[128] New England Journal of Medicine, March 19, 1992
[129] Journal of the American Medical Association 2001; 285:
2331-2338.
[130] Langreth, p. 250, 254.
[131] Obstetrics and Gynecology 95:199, 2000.
[132] Leape's estimates are variously cited as running the
gamut from 44,000 to 100,000 to 180,000.
[133] These estimates would ironically make hospitals
America's deadliest industry. Imagine the government
inquisition that would move against the airlines and
Boeing if jet travel were as unsafe as hospitals.
[134] Nurses' duties are heavily restricted in many
jurisdictions by state-level acts. By some estimates
(Wolinsky, p. 142) nurses could provide up to 80% of
the care now delivered by primary-care physicians at
about 40% of the cost.
[135] Journal of the American Medical Association, July 1999
[136] Despite pharmacists being much more knowledgeable than
M.D.s about drugs, AMA not only stands in the way of
pharmacists prescribing drugs but destroyed their
ability to write refills (Rockwell, p. 20).
[137] Another worthy topic for Leape might be a study of all
the people who unnecessarily die because they don't
get to the hospital in time. The estimates might dwarf
Leape's alarming ones on errors. Severe restriction of
the number of hospitals in the U.S. and the workings
of the corrupt hospital cartel is material for another
long and depressing article.
[138] One final possible nail in the allopathic coffin is a
fascinating report in the U.K. Independent of the
claims by Glaxo Smith Kline geneticist Alan Roses,
M.D. that "most [prescription] drugs do not work for
most patients."
[139] Some frictional unemployment certainly exists (e.g.,
after med-school graduation). There has also been a
bit of outsourcing in radiology, although that will
come to a quick end if the American College of
Radiology gets its way. What does not exist is a
"shortage" of physicians despite ample assertions to
the contrary (see Tully). A shortage exists in the
case of a wage ceiling, where market wages are fixed
at a below-equilibrium level. First, physician wages
aren't fixed under equilibrium, and they're anything
but too low.
[140] Langreth, p. 254.
WARNING CORRUPTION OF THE AMA
100 Years of Medical Robbery
by Dale Steinreich
[Posted June 11, 2004]
Our mentor has always been Hippocrates, not Adam Smith --
President of a County Medical Society at an AMA meeting
quoted in the February 16, 1981 issue of the New York Times.
This weekend (June 11-13, 2004), the American Medical
Association (AMA) will celebrate the 100th anniversary of
its Council on Medical Education. The medical establishment
understandably sees the formation of the Council as a good
thing. However, some patients aren't ready to celebrate yet,
and their instincts may be good.
History
The American Medical Association (AMA) was founded in 1847
around two propositions: one, all doctors should have a
"suitable education" and two, a "uniform elevated standard
of requirements for the degree of M.D. should be adopted by
all medical schools in the U.S." [1] In the days of its
founding AMA was much more open--at its conferences and in
its publications--about its real goal: building a government-
enforced monopoly for the purpose of dramatically increasing
physician incomes. It eventually succeeded, becoming the
most formidable labor union on the face of the earth.
AMA's initial drive to increase physician incomes was
motivated by increasing competition from homeopaths (AMA
allopaths use treatments--usually synthetic--that produce
effects different from the diseases being treated while
homeopaths use treatments--usually natural--that produce
effects similar to those of the disease being treated). This
competition did serious damage to the incomes of AMA
allopaths. In the year before AMA's founding, the New York
Journal of Medicine stated that competition with homeopathy
caused "a large pecuniary loss" to allopaths. [2] In the
same issue, the dean of the school of medicine at the
University of Michigan railed against competition because it
made treating sickness "arduous and un-remunerative." [3]
Apart from reversing rapidly declining incomes, allopaths
also wanted to rescue their public reputations, which quite
reasonably suffered given their proficiency in killing
patients through such crude practices as bloodletting
("exsanguination") or mercury injections (poisoning). A few
allopaths desired adulation normally reserved for star
athletes and actors. The Massachusetts Medical Society
opined in 1848 that physicians should be "looked upon by the
mass of mankind with a veneration almost superstitious." [4]
Shut 'em Down
The curse of medical education is the excessive number of
schools--Abraham Flexner, 1910.
To accomplish the twin goals of artificially elevated
incomes and worship by patients, AMA formulated a two-
pronged strategy for the labor market for physicians. First,
use the coercive power of the state to limit the practices
of physician competitors such as homeopaths, pharmacists,
midwives, nurses, and later, chiropractors. [5] [6] Second,
significantly restrict entrance to the profession by
restricting the number of approved medical schools in
operation and thus the number of students admitted to those
approved schools yearly. [7]
AMA created its Council on Medical Education in 1904 with
the goal of shutting down more than half of all medical
schools in existence. (This is the Council having its 100th
anniversary celebrated in Chicago this weekend.) In six
years the Council managed to close down 35 schools and its
secretary N.P. Colwell engineered what came to be known as
the Flexner Report of 1910. The Report was supposedly
written by Abraham Flexner, the former owner of a bankrupt
prep school who was neither a doctor nor a recognized
authority on medical education. Years later Flexner admitted
that he knew little about medicine or how to differentiate
between different qualities of medical education.
Regardless, state medical boards used the Report as a basis
for closing 25 medical schools in three years and reducing
the number of students by 50% at remaining schools.
Since AMA's creation of the Council a century ago, the U.S.
population (75 million in 1900, 288 million in 2002) has
increased in size by 284%, yet the number of medical schools
has declined by 26% to 123.[8] [9] In terms of admissions
limits, the peak year for applicants at U.S. schools was
1996 at 47,000 applications with a limit of 16,500 accepted.
[10] This works out to roughly 64% of applications rejected.
[11] On a micro level, for the last six years the University
of Alabama (hardly a beacon of prestige in the medical
discipline) has averaged about 1,498 applicants per year
with an average of about 194 accepted. This is about an 87%
rejection rate. The sizes of the entering classes have been
of course even smaller, averaging about 161.
AMA would likely argue that there's nothing necessarily
wrong with very high rejection rates. This is correct,
except for the fact that these rates are being applied to
pools of candidates who are cream-of-the-crop in quality and
have put themselves through a very costly admissions
process. [12] Current admissions practices could still be
justified by what Milton Friedman (1982, p.
153) refers to as a "Cadillac standard." (Getting away from
the pop-culture anachronisms of the 1960s, let's say
"Lexus standard" a la the government decides that every
driver today deserves nothing less than Lexus quality.)
Applied to health care, the benefits of a Lexus
standard could supposedly offset the costs of rejecting
many ostensibly qualified applicants.
Quality
The first problem with asserting the existence of a Lexus
standard in health care from very stringent admissions
policies are the contradictions introduced
found that at a sample of six medical schools, more than
3,500 white and Asian candidates were not admitted in
spite of having higher undergraduate grades and MCAT
scores than Hispanic and African-American applicants who
were admitted in
undergraduate science professors indicate that it clearly
exists as well. [13]
The second blowout on our shiny Lexus would be the number of
unnecessary/questionable procedures performed on patients
every year. Ex-surgeon Julian Whitaker (1995) tirelessly
rails against the excesses of angioplasty (PTCA),
atherectomy (directional and rotational), and coronary
bypass. [14] Whitaker states that, with few exceptions, all
three procedures for heart-disease patients have been
empirically shown to be utter failures in terms of solving
short-term problems without creating long-term problems
which are much worse.
The first complete study of bypass effectiveness was the
Veterans Administration Cooperative Study [15]. Between 286
patients who received bypass surgery and 310 who did not,
the survival rate at the end of 3 years was 88% for the
bypass group and 87% for the control group. In an 8-year follow-
up to a second VACS study [16] among 181 low-risk patients,
the bypass group had a much higher cumulative mortality rate
(31.2%) compared to the non-surgery group
(154.8%). This was among a group of low-risk patients to
begin with.
A Rand study [17] revealed that nearly 50% of bypass
operations are unnecessary. Whitaker [18] notes that the
number of bypass surgeries since this Rand study, which
should have plummeted, has increased by more than 50%. While
the death rate from heart disease declined from 355 per
100,000 in 1950 to 289 per 100,000 in 1990, the amount of
bypass operations jumped from 21,000 in 1971 to 407,000 in
1991, a increase of more than 1,838%. [19] Whitaker states
that laypersons are quick to attribute increases in life
expectancy to surgery, but the credit clearly belongs to
greater exercise and healthier diets.
Other examples:
180 patients with osteoarthritis of the knee were given
arthroscopic débridement, arthroscopic lavage, or placebo
surgery (skin incisions and simulated débridement). In two
years of follow-up the surgery group reported no less pain
or impaired joint function than the placebo group. Six
placebo patients liked their fake surgery so much they
wanted it performed on their other knee.[20] For other
arthroscopies, knee surgeon Ronald Grelsamer, M.D., states
that at some hospitals doctors are performing as many as
"ten a week [where] nine are unnecessary." [21] Jens Ivar
Brox, M.D., in a Norwegian study compared the effects of
spinal fusion surgery with non-surgical therapy for 64
patients with chronic lower-back pain and disc
degeneration. The non-surgical treatment was as effective
as surgery, but at a fraction of the cost with no
complications.[22] With regard to fusions for lower back
pain, Nortin Halder M.D., stated, "If this were a pill and
I used it, I would probably lose my license and go to
jail." Nevertheless, there are about 125,000 fusion
surgeries a year at $30,000 each bringing back surgeons a
hefty yearly median income of $545,000.[23] Stuart
Spechler, M.D., studied 247 patients with severe acid
reflux in the 1980s and found that surgery was
significantly more effective in improving symptoms than
lifestyle changes and drugs. [24] These results reversed in
the 1990s after the introduction of proton pump inhibitors
(today's Prevacid, Nexium). About 62% of surgery patients
still needed drugs to control reflux and had no less
incidences of esophageal cancer than non-surgery patients.
[25] Mayo Clinic's Yvonne Romero, M.D., is even more
pessimistic, pointing out that in countries where surgery
has been performed longer than the U.S. (e.g., Brazil), as
much as 85% of surgeries fail after 15 years. Says
Spechler, "When you look at data it is hard not to be
biased against surgery." Nevertheless, about 65,000 Nissen
fundoplications are performed each year at a price of
$10,000 each. [26] Hysterectomy (uterus removal) is the
probably the best example of an often unnecessary surgery.
While a necessity for uterine cancer patients, gynecologist
Michael Broder, M.D., found that in a sample of about 500
women, about 70 shouldn't have received the surgery for any
reason whatsoever and about 350 hysterectomies had been
performed without any diagnostic tests to determine if the
surgery was appropriate in the first place. About 70 women
with benign fibroids had their uteruses removed without
first trying drugs or other treatments that could have been
effective. [27]
A final challenge to the Lexus standard is the number of
accidental deaths occurring in U.S. hospitals every year.
Harvard University's Lucian Leape estimated that there are
approximately 120,000 accidental deaths and 1,000,000
injuries in U.S. hospitals every year. [28] To understand
what staggering figures these are, imagine a Boeing 777-200
with its maximum of 328 passengers crashing every day for an
entire year with no survivors. This would add up to 119,720
deaths, still not as many as are killed through medical
error in hospitals every year. UCLA Professor of Medicine
Robert Brook, M.D., told the Associated Press, "The bottom
line is we have a system that is terribly out of control.
It's really a joke to worry about the occasional plane that
goes down when we have thousands of people who are killed in
hospitals every year." [29]
Certainly not all accidental hospital deaths can be
attributed to institutionalized AMA mischief. Errors by
nurses, pharmacists, and sleep-deprived residents play a
role as well. However, there's also no doubt that AMA-backed
restrictions against greater specialization have helped
wreak their havoc over time as well. [30] A later study by
Leape [31] showed that just the presence of a pharmacist on
physician rounds reduced adverse drug reactions from
prescribing errors by 66%. [32] [33] Despite some
shortcomings, the U.S. system still has some of the finest
physicians, surgeons, research, and facilities in the world.
However, the best aspects of the system are due to whatever
vestiges of market freedom still survive, not some illusory
Lexus standard supposedly created by strict statist
controls. [34]
The Exceptional World of the Modern Physician
AMA has built an impressive edifice, one that has completely
insulated physicians from recessionary ("cyclical") and
until recently, technological ("structural") unemployment.
While decade in, decade out, recessions, depressions,
consolidations, and (recently) outsourcing have dislocated
millions of blue-collar, engineering, computer programming,
and middle management employees from jobs and forced
permanent career changes, physicians as a class have been
almost completely immune. Unlike workers in most other
industries, a competent, licensed physician with a clean
record who remains unemployed despite months and months of
search for work is unheard of in the U.S. [35]
Restricting labor supply has markedly boosted incomes.
Median yearly salaries for primary-care physicians are
$153,000, for specialists $275,000. [36] Another more
recent survey across many specialties and 3+ years of
experience makes hospitalists relative paupers of the
profession at $172,000 and spine surgeons at the high end
raking in $670,000.
Restricted supply aside, there's certainly nothing wrong
with competent physicians becoming fabulously wealthy at
their craft and nothing about a free market that would ever
preclude such. Indeed one of the worst transgressions of
current system is allowing the most rude, incompetent, and
stupid physicians
(e.g., Clinton Surgeon General Jocelyn Elders who wanted
public schools to teach first graders how to
masturbate) to earn incomes relatively close to
competent ones.
Of course life is not a complete bowl of cherries for all
physicians. Malpractice insurance premiums for some Ob/Gyns
are now running as high as $160,000 per year. Some Ob/Gyns
have been lucky to have their hospitals pick up the tab.
Others have had to move to different states. No one would
disagree with AMA that paying $160,000 in insurance premiums
is outrageous.
The problem is that AMA's restriction of labor supply has
made the problem worse at the margin than it otherwise would
be. Plus, exactly how does a thoroughly rent-seeking
organization such as AMA lecture malpractice attorneys on
the adverse consequences of wealth redistribution? It can't
with any convincing credibility, thus it has no effective
answer to some in the far Left either, who want to conscript
physicians to provide infinite "free" care to them because
they claim they have a "right" to it.
Robots to the Rescue?
Two recent articles on the Web show two divergent paths the
U.S. health care system can take. A recent story on MSNBC
reflects the worsening status quo. It was a report on a new
robot ("robo-doc") that roams hospital halls visiting
patients in place of a physician (see photos). The robot is
controlled from remote location by a physician. The device
is an obvious implicit attempt to cope with the artificial
scarcity of physicians. Most of the patients, instead of
laughing the pathetic robot out of their wing, thought the
idea was jim dandy. Presumably they couldn't explain how the
armless robot would resuscitate them if their conditions
took a sudden turn for the worse.
On the other hand, the great Ron Paul, M.D., has recently
discussed the trend of cash-only practices which reject all
insurance as well as Medicaid and Medicare. He profiles a
Robert Berry, M.D., who charges only $35 for routine visits.
(This is about half to a third of what I'm typically charged--
with insurance at that--and yet my current doctor, whose
income in one year exceeds what I make in five, is moving to
another practice because she wants more money.) Cash-only
practices of course do nothing to address physician supply,
but some relief is better than none, especially when living
in a clueless American public that thinks robo-docs
represent actual progress in medicine.
A happy 100th birthday to the Council on Medical
Education...and for the sake of all our health, hopefully
not too many more.
________________________
Dale Steinreich, Ph.D., is an adjunct scholar of the Mises
Institute, and contributor to AgainstTheCrowd.com. The
author is indebted to Llewellyn H. Rockwell, Jr., for his
incisive synopsis of AMA history in the June 1994 issue of
Chronicles. Comments by economists L. Aubrey Drewry, Jr.,
Ph.D., Paul A. Cleveland, Ph.D., and Richard O. Beil,
Ph.D., were of great value. dsteinreich@msn.com. Comment
on the Blog.
References Friedman, Milton. Capitalism and Freedom.
University of Chicago, 1982. Langreth, Robert. "Is
Elective Surgery Overdone?" Forbes. 27 Oct. 2003, 247+.
Rockwell, Llewellyn H., Jr. "Medical Control, Medical
Corruption." Chronicles. June 1994, p. 17-20. Starr, Paul.
The Social Transformation of American Medicine. Basic,
1982. Tully, Shawn. "America's Painful Doctor Shortage."
Fortune 16 Nov. 1992, p.
104.Whitaker, Julian. Is Heart Surgery Necessary? What Your
Doctor Won't Tell You. Regnery, 1995. Wolinsky, Howard
and Tom Brune. The Serpent on the Staff: The Unhealthy
Politics of the American Medical Association. Tarcher
Putnam, 1994.
Notes
[105] Rockwell, p.17.
[106] ibid, p. 18.
[107] ibid, p. 18.
[108] ibid, p. 18.
[109] Chiropractors filed an antitrust suit against AMA and
eventually won on August 24, 1987. AMA had dismissed
chiropractic as quackery since at least 1925 and began
an organized effort to shut it down in 1962. See
Wolinsky and Brune, pp. 124, 139-40.
[110] Starr (1982) asserts that it is a myth that allopaths
achieved dominance by crushing homeopaths and
eclectics. He claims that once homeopaths and
eclectics joined forces with allopaths for
occupational licensing and thus began to blur their
distinctions, public approval of homeopaths and
eclectics died.
[111] Friedman (1982, p. 152): "To return to medicine, it is
the provision about graduation from approved schools
that is the most important source of professional
control over entry. The profession has used this
control to limit numbers." Blocking entry is much more
effective than just raising the real price of a
medical license; the "far more important" measure is
"establishing standards for admission and licensure
that make entry so difficult as to discourage young
people from ever trying to get admission" (p. 151).
[112] This actually understates continual declines. Starr
(1982, p. 421) reports that in 1965 only 88 schools
existed meaning that the Council almost reached its
goal of a more than 50% closure of schools.
[113] The 123 AAMC listed schools include the newest at
Florida State University, but not the three med
schools in Puerto Rico. Unlike Puerto Rico, 19 states
are limited to just one school.
[114] Assuming 125 schools at the time, including those in
Puerto Rico. This works out to about 132 new
admissions per school.
[115] Source: John Ross, President of Ross University
Medical School in Domenica, 1997 interview on Westwood
One's Jim Bohannon Show. Here for recent stats.
[116] The admissions process involves sizable application
fees and the Medical College Admission Test (MCAT).
MCAT can, with practically no exceptions, only be
taken twice.
[117] One chemistry instructor at the University of Alabama
told me strictly off the record, "If you're a white
male who is 27 (not the usual 21-23), you're an old
man as far as med-school admissions goes. They won't
take you regardless of how good your GPA or MCAT
looks. You have to go to a Caribbean school or forget
medicine as a career. For white and especially black
women, you can not only have mediocre grades and a
mediocre MCAT, but be as old as 35 and still have a
pretty good chance of getting into a U.S. school. I've
seen it again and again."
[118] Angioplasty involves inflating a small catheter
balloon to clear blocked arteries, atherectomy
clears blockages with blades or burr tips in lieu of
a balloon.
[119] New England Journal of Medicine 311 (1984): 1333-1339.
[120] American Journal of Cardiology 74 (September 1,
1994): 454-58.
[121] Journal of the American Medical Association 260, no. 4
(July 22/29, 1988).
[122] p. 26.
[123] Whitaker, p. 71.
[124] New England Journal of Medicine, July 11, 2002
[125] Langreth, p. 248.
[126] Annual European Congress of Rheumatology, June 20,
2003
[127] Langreth, p. 248.
[128] New England Journal of Medicine, March 19, 1992
[129] Journal of the American Medical Association 2001; 285:
2331-2338.
[130] Langreth, p. 250, 254.
[131] Obstetrics and Gynecology 95:199, 2000.
[132] Leape's estimates are variously cited as running the
gamut from 44,000 to 100,000 to 180,000.
[133] These estimates would ironically make hospitals
America's deadliest industry. Imagine the government
inquisition that would move against the airlines and
Boeing if jet travel were as unsafe as hospitals.
[134] Nurses' duties are heavily restricted in many
jurisdictions by state-level acts. By some estimates
(Wolinsky, p. 142) nurses could provide up to 80% of
the care now delivered by primary-care physicians at
about 40% of the cost.
[135] Journal of the American Medical Association, July 1999
[136] Despite pharmacists being much more knowledgeable than
M.D.s about drugs, AMA not only stands in the way of
pharmacists prescribing drugs but destroyed their
ability to write refills (Rockwell, p. 20).
[137] Another worthy topic for Leape might be a study of all
the people who unnecessarily die because they don't
get to the hospital in time. The estimates might dwarf
Leape's alarming ones on errors. Severe restriction of
the number of hospitals in the U.S. and the workings
of the corrupt hospital cartel is material for another
long and depressing article.
[138] One final possible nail in the allopathic coffin is a
fascinating report in the U.K. Independent of the
claims by Glaxo Smith Kline geneticist Alan Roses,
M.D. that "most [prescription] drugs do not work for
most patients."
[139] Some frictional unemployment certainly exists (e.g.,
after med-school graduation). There has also been a
bit of outsourcing in radiology, although that will
come to a quick end if the American College of
Radiology gets its way. What does not exist is a
"shortage" of physicians despite ample assertions to
the contrary (see Tully). A shortage exists in the
case of a wage ceiling, where market wages are fixed
at a below-equilibrium level. First, physician wages
aren't fixed under equilibrium, and they're anything
but too low.
[140] Langreth, p. 254.
