However, we see above that the problem with provision of health care services to ‘all Americans’ say, lies firstly in the imposition of a minimum standard of care by the state. Thus, Mr. Wilkinson’s implication of a return to little or no certification is an alternative option to health care provision augmentation among the lower end of the socioeconomic spectrum, to the present proposals of federalized insurance for all. The most salient economic question, in my view, would be which alternative will render the largest growth in productive activity, which does not mean material productivity per se (and mind you), but simply more time and energy spent providing services by individuals for others (could be a mom having more time to spend with her children for example, on account of not being sick as often).

Other than that, it’s caveat emptor.

…

But while large medical groups often are loss- or experience-rated, whereby the insurer’s statewide experience is matched up against the group’s own experience to determine how much variance that group should be granted from statewide rate levels, an individual doctor’s own historical experience level generally isn’t considered enough of an actuarially credible factor to support substantial deviation from a standard rate.

At most, you might build some parameters into the rate structure to recognize the individual risk characteristics of an individual insured to allow for some variation around the statewide rate, so that rate can be adjusted up or down based on objective criteria — such as the absence or presence of previous losses. For instance, if a person went an extended period of time claim-free, they would earn a credit off of their rates. But if a person had a $100,000 paid claim or a $200,000 paid claim, you’re going to treat those in a similar fashion.

Contributing to the futility of rating individual doctors based on their claims experience is the fact that the vast majority of doctors will be sued at some point during their careers, and most on multiple occasions. While a majority of the cases are dropped or dismissed, defense costs will be paid by means of claims against a doctor’s policy. That doesn’t mean that all doctors are bad, but it means that even good doctors are going to pay like they’re bad doctors in the current environment.

Hence, as with all forms of insurance, the first determination to be made is whether a particular doctor, hospital or medical group represents an acceptable risk to underwrite at all.

If the only thing you have to segregate acceptable risks from unacceptable risks is a four-year medical degree, then you can bet dollars to donuts that Manny’s going to get the short end of that stick.

Without the cartel, there’d be more competition, but lack of competition doesn’t explain everything. Isn’t there enough competition already that we should at least do diagnosis by computer? McCardle says that cartels and unions “resist productivity-enhancing change,” but I don’t believe that’s the explanation. The God Complex you mention is certainly a problem (that would be solved by eliminating the cartel), but I think a bigger one is that the Church discourages people from assessing doctors.

RJ Lehmann: (re: insuring Manny) but why is insurance so conservative? Why don’t actuaries exist?

Actully, various “Mannys” and his ilk DO exist in the black market. Visit certain immigrant communities, and you can find them.

But if the question is why there isn’t a legally-sanctioned Manny’s Stictches Joint, I’d break down the causal factors thusly:

26% — Rent-seeking exercise of monopoly priviledge by the AMA
25% — Legitimate concerns of policymakers about the ability of lay public to make ex ante evaluations of the minimum basic competency of doctors
9% — Reluctance of consumers to use less thoroughly-trained medical staff
Remaining 40% — Because NO ONE would choose to cover Manny’s liability

By and large, we DON’T force drivers to have collision. We force drivers to carry third-party liability. Collision covers property damage done to your own car in an accident. Third party liability covers the property damage and bodily injury that an at-fault driver inflicts on OTHER people.

It’s not a trivial distinction. The idea of requiring TPL (or personal injury protection, PIP, in no fault states) is to force the driver to internalize costs that he might otherwise be tempted to ignore. But even in the current highly regulated insurance markets, we still generally recognize that individuals ought be able to decide for themselves how to handle risks whose impact only they would bear. A lender could require that a driver carry enough collision to cover the outstanding principle on the car, but the overwhelming majority of states have no such requirement as a matter of law or regulation.

Requiring it in health insurance would represent a fundamental break from established insurance law, and would likely have a non-trivial impact on the prices health insurers could extract.

I personally wound up in hospital having an operation because the first doctor we saw assumed that the pain in my foot was a form of growing pains that would go away in 10 days or so. When in fact it was an infection, and by the time another doctor got me on antibiotics the infection was too deep-seated for them to kill it all. (My parents took me back to another doctor 3 days after the first consultation, as the pain was so much worse, imagine the mess I’d be in if we’d gone the whole 10 days).

Or the doctor who missed that my friend’s placenta had died in the last month of her pregnancy. (Well, I guess it’s really the baby’s placenta. She’s fine, but very small.)

I don’t particularly blame doctors. I make mistakes in my job all the time (though the consequences are less). But it does mean that I’m not impressed by claims about risking patient safety - it’s already massively at risk.

“Every profession is a conspiracy against the laity.” — George Bernard Shaw

On the other hand:

It is the hallmark of the gifted practitioner that he makes it look easy, even when it isn’t.