Healthcare Thought Experiment II

In my first "Healthcare Thought Experiement" post back in August, I used the example of a vascular surgeon and the procedure of carotid endarterectomy. Specifically, I asked what sort of decision-making process would a seasoned, older vascular surgeon undertake when faced with a government directive to perform carotid endarterectomies for well below the market price, using approximate number - say $800 versus $3500. I suggested that there are alternative things doctors can be doing with their time to practicing their skill at what they will surely view as insufficient compensation.

Today I would like to address a different slice of the same group, vascular surgeons, the top eschelon of that population. Surely, vascular surgery, indeed most complex medicine, isn't a commodity; there are those surgeons who are more experienced, or more skillful, or more responsive to patients or whatever. These criteria and others are often boiled up into analyses such as this. So let's imagine that you fall within the top 20% of all vascular surgeons, what then is your reaction to federal directives to "bend the cost curve" that will result in substantially less compensation for specific procedures such as the carotid endarteredtomy? Remember, you are the best of the best. Are you going to:

1) Keep practicing this highly complex and special skill you have for the price a plumber would charge to install a sink;
2) Refuse to accept government insured patients for whom you would have to accept insufficient compensation, and only accept patients who can pay, personally or through private insurance, prices that evolve among top-ranked vascular surgeons (aka via the free market).

These are really the only two options as federal rules state (and this certainly will be preserved and/or expanded to any public option) that if a provider accepts one Medicare patient, they must accept all Medicare patients - so once you take from the system, you are bound to the system. So how do you go about deciding what to do, if you could devote 100% of your capacity to carotid endarterectomies. Perhaps if you chose option two you would lose most of the opportunity to perform as many of these procedures as you would like as patients opt for providers who accept the mandated price, hurting your earning potential. However, since you are an elite provider, perhaps not. Perhaps there is enough demand for procedures from people willing to pay the best doctors full price, in which case your earnings potential is not diminished. There is also the possibility that demand falls to somewhere between the mandated price and the free market price. Perhaps that demand means you can only do a percentage of the possible procedures. Well, using our numbers from above, you can make the same money even if your decision results in an 77% reduction in procedures that you perform. So as far as carotid endarterectomies are concerned, you can withstand an 77% decline in demand for your services and still make the same money. With the increased time, you can apply the same calculus to bypass surgeries, stent implantations, etc. to arrive at your optimal income. There are pretty decent odds you could fill your schedule doing procedures for market rates, shunning all government patients and not dent your earnings potential too much.

Next question, let's say many of the top 20% of doctors in any critical field opt for something like option two. What is the government's response when a large chunk of the very best doctors tell patients who carry a government insurance card to beat it? Can the government demand that these doctors treat patients? Is this practical, let alone constitutional? I doubt it.

So, we could have a combination of older doctors and elite doctors opting out of a government healthcare system altogether...is this good for the healthcare system?