Money-driven medicine

Blogger Ezra Klein reviews the book Money-Driven Medicine by Maggie Mahar:

At the head of the Heart Institute was a pair of hotshot surgeons, Dr. Chae Hyun Moon and Dr. Fidel Realyvasquez Jr., renowned in the field and respected by their colleagues. At least until the FBI raided their offices, charging them with forcing hundreds of unneeded surgeries upon unsuspecting patients.

About half of their operations were found to be unnecessary; a quarter were performed on patients with no serious heart problems whatsoever. Thirty-eight-year-old rancher Steven Hunt made the mistake of setting foot into their unit in late 2001. He was opened up for a bypass operation two days later. Not long after, the incision developed a hernia, and his upper-body strength deteriorated, ending his work as a rancher. The tragedy of it all was that Hunt suffered from nothing more than high blood pressure, easily controllable through medication and diet.

This is obviously an extreme case, as most doctors don't prescribe a heart bypass for high blood pressure. But this story illustrates yet another problem with free-market healthcare: there's always pressure on providers to prescribe the most profitable treatments, which might or might not be the most effective treatments. Whenever providers in the free-market system give you cheaper treatments, they're acting against their own financial self-interest.