Decommodification and health care utilization

I am listening to an episode of the Left Anchor podcast. Among other great things, guest Mark Paul calls not just for universal health care, but for "decommodifying" health care.

Health care, he reminds us, is famously a festival of market failures. Absenting health care provision — like we exempt, say, national security provision — entirely from consumer markets makes some sense, even from a neoliberal perspective. Regulated markets are how neoliberals usually address market failure, but in principle if, say, barriers to informed consumer choice are severe enough, nonmarket provision might well be more efficient than relying upon consumer discipline at all.

But if consumers literally bear no cost at all for the health care they receive, won't they overconsume? The usual story with "Medicare For All" is that we'd gain some efficiency from eliminating the private insurance layer (which costs tremendous complexity and a whole lot of money) but we'd increase aggregate medical provision. The presently uninsured would enjoy new care and people who now ration their own access for fear of financial burden would make greater use of the system, yielding health benefits. But this would also increase demand and cost.

Paul's use of the term "decommodification" had me wondering, however, about what reforms might mean for the supply side of health care provision, and how that might affect utilization. As Nick Rowe has pointed out many times, the usual condition of under which commodities are provided under capitalism is supplier market power. Suppliers are eager to supply. It is easy to buy things, while sales is a difficult job.

This seems as true for health care in the United States as it is for other services. We are bombarded by ads for clinics and pharmaceutics. Television commercials ask us to try on diagnoses they suggest, and then ask our doctors. Our doctors are paid (via a complicated melange of sources) more for each service than what it costs to provide. Like shoe-sellers, they do well when they are busy, they go bust when patients cease to come.

John Kenneth Galbraith (via Chris Dillow) writes

The fact that wants can be synthesised by advertising, catalysed by salesmanship and shaped by the discreet manipulations of the persuaders shows that they are not very urgent. A man who is hungry need never be told of his need for food.

Under capitalism a persuasive apparatus emerges to sell us unnecessary baubles. Fine. There are worse things than having baubles. But superfluous health care services impose deadweight losses besides the financial transfers they provoke. Surgeries are painful and bring risks of complication. Medication has side effects, sometimes very serious. Drugs aggressively sold provoke addictions that destroy lives, families, and communities.

If the ordinary result of commodification under capitalism is imperfect competition favoring sellers and then aggressive persuasion to maximize profits, then wouldn't we expect commodified health care to be overutilized? Wouldn't we expect the (important! good!) health care produced by the system be offset somewhat by manufacture of disease and addiction, matched by provider profits? And isn't this exactly what most of us think we see?

The cost of profit-motivated health-care overutilization is higher than the sum of individual disabilities and addiction occasioned by unnecessary care. The phenomenon has a much broader social consequences. It profoundly undermines the public's trust in education and expertise.

  • The anti-vaxx movement is rendered credible to its adherents almost entirely by the conjecture that the pharmaceutical industry is very interested in getting us to take their products, and less interested in our heath.

  • Anti-trans activists, when confronted by the strong consensus among medical providers in favor of cautious, incremental gender-affirmative care, argue that medical associations are corrupted by providers' interest in a lucrative new care market. How can you trust these people who are selling us the sterilization of our children?

A health care system that passes off sometimes debilitating baubles as medical necessities becomes hard to take seriously in its advice about what is actually a medical necessity. Which makes it hard for us as a society to come to consensus, even when — as in the case of most vaccines and most trans care — the medical benefits are very real.

I think that it is certainly true, as the conventional case goes, that "decommodifying" health care would increase utilization by people currently discouraged from accessing health care for financial reasons. And to the degree that "decommodification" just means health care gratis at the point of service without making deeper changes to the system, then that will be the dominant effect.

But what if by "decommodification" we mean something more, if we mean to alter the institutions and incentives surrounding health care provision so that there is not a profit motive attached to ever more provision? How much would any increase in utilization due to more inclusive access might be offset by a reduction in demand we might describe as induced by providers who profit from erring on the side of more provision? Could a decommodified health care system find ways of delivering equal or better health outcomes from fewer procedures, visits, and medications, rather than just delivering more to more people?

If so, then sure, that increases the political case for wholesale reform, under the banner of "Medicare For All" or whatever. Medicare For All may be cheaper than we think, if it helps move us towards buying outcomes rather than procedures.

But more than that, it is impossible to sustain modernity under conditions where the expertise we must rely upon is undermined by financial interests. This is a broader problem than just medicine. I don't think we'll really address it until we reduce the sway of financial motivation by reducing dispersion of outcomes. (Mark Paul, in the same podcast, proposes an income floor and cap. Hurrah!)

But medicine is the signal example of expertise in most people's lives. A world in which doctors can't be trusted because their financial incentives and patient welfare diverge is a world in which it will be hard for people to trust almost any form of professional expertise. We are seeing measles again. We are seeing polio. Fascist inimicalization of sexual minorities is rendered plausible to much of the public in part by perceived corruption of experts on whose work we must rely if we are to discredit and overcome prejudice.

For reasons beyond accessibility and cost reduction, we need to think about decommodifying medicine. Along with expertise in general.