Epistemic status: I find economics unintuitive. This post is unusually embarrassing to make. People smarter than me seem to explain this in ways other than my dumb model. Yet, the model keeps occurring to me. So here it is.
I have eczema. I have been on corticosteroids for years, which have noticeably thinned my skin. I wanted to try Dupixent, a fancy immunomodulator injection that sometimes just fixes eczema. I received the first shot at a clinic and asked to have the rest prescribed so I could inject at home.
When I went to the pharmacy, they didn’t have it. I called my insurance and learned they had denied it because they didn’t have proof I’d tried enough corticosteroids, and my doctor had neither told me to take some action nor told them I have been on corticosteroids. Maybe because she didn’t have proof other than my word. Who knows.
While I waited in line at the pharmacy, doing the Asian squat while playing Nertz on my phone, the elderly woman right in front of me ranted to the pharmacist that she couldn’t get her prescription because of all the relevant institutions were telling her “we can’t do it without this other guy saying yes”. The pharmacist listened to several minutes of this with a stolid microsympathy and said, “sorry but no we still cannot give you the meds without a prescription”. She left, saying she knew she must have been a pain. And it was my turn to go up to the counter and discover I didn’t get my thing either.
Dupixent is a pretty niche medication that costs $4200 out of pocket. I keep thinking that the nightmarish phone games you’re obliged to play to get uncommon meds are the self-protective spasms of a meta-institution that can’t cash its checks. It doesn’t make economic sense to make it easy for me to get it for approximately zero (additional) dollars. Making me prove I’ve tried easier and cheaper eczema medications is honestly quite a low bar, a legible bar, compared to simply not picking up the phone.
In an extended conversation with friends where I thought out loud about this, an American friend characterized US healthcare in the following way (bolded mine):
we are committed to never ever saying “no you can’t have this medical care” in a definite way. it’s only ever “you have to wait”, “you have to pay a large non-transparent bill”, “it’s not medically good for you”, “you have to jump through hoops first”… never a direct admission of scarcity.
It’s the obvious, simple explanation: the system doesn’t “want” to give you the meds, because the meds are expensive, so it throws up these walls so only a few people who want the meds can get it. Maybe broad scale health healthcare is not actually economically feasible. Despite the prima facie terrifying amount the US spends on healthcare, it actually isn’t wealthy enough to provide the healthcare that it promises, and as long as it promises in theory to address all ailments, it has to deliver in a shitty, time-wasting, insanity-inducing way.
When I shot this post draft at an AI for obvious inaccuracies, it used the term “rationing by friction”, which I loved so much I googled it to see if it were an established term. It seems to be from this tweet, which addresses the same phenomenon:
I want to think out loud a little bit about a concept that has been stuck in my head for the past few months: “Rationing by friction” the (sometimes unintentional, sometimes malicious) phenomenon of restricting access to govt services by way of process & paperwork requirements
I often see components of the US healthcare system accused of malice. Perhaps this is true! I am hopeless at navigating my own healthcare, and feel incompetent to analyze the system in detail. But to some extent one doesn’t need to understand the details to look at the big picture numbers and draw big picture conclusions like “insolvency alone could explain the behavior of the system”. (If this is true, I find it frustrating – accusing an entity of malice when in fact they are just poor seems like the most foot-shooting misunderstanding.)
As far as I can remember, Korea did not pull the shit that US healthcare does. But Korea is not a world leader in medical technology. I think they often don’t have the 10 million dollar intervention? So (I hazard) if you need it, you just die and they don’t spend 10 million dollars, and they can now spend those 10 million dollars treating 1000 people for not-that-expensive things.
So my stupid model is that you can have two of three:
- “(The claim of) non-scarcity as an invariant”: A cultural expectation that no one will die because they can’t afford medication, even medication that’s new and costs a lot to develop
- A “nice feeling” healthcare system where making appointments, filling prescriptions, etc is painless
- An active and productive medication R&D sector that causes new and (initially or inherently) expensive medication to enter the market at a steady trickle
Korea doesn’t have the last one, at least in that no one expects to get the cutting edge treatments that the US is coming up with. The US has the first and third ones. I think no one has chosen the second and third options, which would be my picks.