Seinberg: the specialist gives referral bonuses for patients.

You must be thinking about attorneys or businessmen. For doctors, such violates federal law, if the patient is on Medicare or Medicaid. If no federal money is involved, it is a violation of of state licensure regulations in all 50 states. For the federal aspect, there is both a monetary penalty (reimbursement and fines) and the possibility of prison time. The federal reward to anyone who reports such a doctor is a minimum of $10,000 (a whistle-blower in my town recently received over $600,000 for reporting Medicare infractions). Either way, the doctor will lose his license if kickbacks are proven.

I mentioned a similar situation about violation of patient privacy (on an earlier OB thread), and reader "Douglas Knight" said he didn't think the penalties were ever enforced. They are. People will report their own mothers for that kind of money.

BTW, where do you think all the doctors who train at the world-class centers, and then set up private practices, are in practice? Why would you think the Maryland and Johns Hopkins grads who didn't choose to be professors are "not as well-trained"?

Expand full comment

Robin -

I think those studies miss important aspects of clinical practice. The less experienced, less well-rounded a physician is (e.g. a PA or nurse etc.), the more likely they are to practice "defensive medicine". I admit to not having studies to back this up -- although I wouldn't doubt if they *did* exist -- but my girlfriend is a doctor and we have several friends who are doctors, so I do have some insight into the situation. Practicing "defensive medicine" means that, as soon as something outside of the very basic treatable-by-meds condition comes up, which is more prevalent among less experienced and less well-trained physicians, the first thing that a physician does is refer the patient to a specialist. So while the less experienced physician may cost less for his or her services per whatever-unit-of-work, if that same physician refers patients to specialists more often -- i.e. at times when it isn't necessary -- the financial burden on patients can quickly become equal to or *worse* than seeing a more highly trained physician in the first place.

Here in Baltimore there are two world-class medical centers - Johns Hopkins and the University of Maryland Medical Center. From what I understand, in these two institutions there's actually a joke about the "community hospitals" (i.e. non-academic centers where doctors are, more or less and on average, not as well-trained) -- that anything other than a stuffy nose will get referred to a specialist. The reason is two-fold: that they simply don't have the training and expertise to diagnose more difficult problems, so defensively they refer a patient to a specialist; and (this is cynical, but perhaps not untrue) because the specialist gives referral bonuses for patients.

So again, not a scientific study, I admit, but I still think it's an account that's missing in the studies you quoted, and complicates the findings. For basic everyday conditions like colds, certain easily-diagnosable infections, etc. that study is almost definitely right-on, but as soon as diagnoses get more complicated I bet the study breaks down.

- Seinberg

Expand full comment

I disagree with Eric Falkenstein regarding the effect of allowing nurses and physician assistants to "do more". Both in law and in medicine there has been a two decade-long drive to push work down to the cheapest billing unit (whether a physician's assistant/nurse or an associate/paralegal). All it has done is to allow the professional to see more patients/clients in less time more profitably. Why? Because it allows the doctor/lawyer to build a pyramid of billing units under himself who collectively wind up charging more than the doctor/lawyer alone ever could for the services actually provided.

The real problem is that patients/clients are trying to buy results from doctors/lawyers who are selling hours. Because the results being sought and the services being sold are subjective it is extraordinarily difficult for normal pricing mechanisms to function effectively. The fact that price signaling mechanisms are muffled, thanks to a mere $5 co-pay for the person making the subjective judgment about the doctor, further exacerbates the problem. That's why lots of doctors with poor skills but great bedside manner wind up rich while skilled doctors lacking empathy wind up merely well off.

If we could agree on what constitutes "a good result" or outcome for a given ailment/dispute we could quantify and so price the services being sold; and the market would take care of the rest. Until then nothing will change.

Expand full comment

From my experience in emergency rooms-We could save boatloads of money if there were competent gatekeepers whose job would be-1- You can go home-all will be well2- go see the practiciner who will bandage you up...(First aid)3- you need to see a doctor- come back at this time4- you need to see a doctor NOW!

Most- the vast majority (sorry for not being more specific) of the people I encountered at an emergency room fit into 1 and 2 above.

The 4's were usually pretty darn obvious (blood pouring out of somewhere, unconscious,...)We could save billions and would make medical care much more affordable to all.

Expand full comment


Bingo! I think it is also a big factor in the "second half of medical care" that we don't need, or that is unhelpful. The number one reason in the US for malpractice actions is "failure to diagnose". If you seek attention, you'll get tests and "treatment". No one (almost?) is told, "I don't think it's serious; you'll get better on your own," as about half should be.

Expand full comment

Does the shocking cost of malpractice insurance conspire to stifle innovation in health care delivery in this instance?

Expand full comment

I've been wondering for some time why acute care clinics primarily staffed by PAs and Nurses, supervised by an MD (in the mode of regional manager) are not more prevalent. Recently, I have seen more Docs in a Box springing up around town. I checked one of them out for treatment for an ear infection and found it to be clean, proffesionally staffed and quick.

Expand full comment

+1 for Minute Clinic

What I can't understand is why hospitals don't contract with Minute Clinic or some service like them to reduce costs, particularly for the emergency room.

Expand full comment

nice post. i see this as a good example of where excessive regulation is doing a lot of harm to people.

Expand full comment

@what are the limits to what medical procedures non-MD's (say PA's and nurses) can do?

Each state has its own laws, and each state has its own licensing entity, all with local rules (after all, it is a guild). In my state, and I think all others, all non-doctors delivering health care must be under the supervision of a licensed physician. The key word is supervision, which often is "on paper" only: a physician takes the legal responsibility, but may not be involved in, or even present for, the actual delivery of the service. The roles of non-physician clinicians are obvious in a non-surgical setting, but I suspect the general public (Including Robin Hanson) knows little of what goes on behind the scenes with regard to who does what. The preponderance of US health care is delivered by non-physicians. Hospital care of the patient, for instance, involves very little doctor-patient contact; the doctors write the orders, and the hospital personnel and PA's do the contact aspects (hence the inappropriate conclusion drawn by Hanson regarding nosocomial infections in his post Doctors Kill).The overwhelming majority of anesthesia in the US is administered by nurses. Anesthesia is one of the most dangerous areas of medical practice (it is in the highest level of malpractice risk assessment in my state, out of eight categories). Nurse anesthetists not only are not resented by anesthesiologists (doctors), but are sought after and paid higher wages by far than any other nursing category. They even work independent of doctors (under the sign-off system described above); I have done a lot of surgery this way, as described here. PA's and nurse clinicians often perform routine aspects of surgery, such as closing wounds, but I know of no start-to-finish surgical procedures performed by them (legally).

Hanson has said that we need to eliminate half of US medical care, and I agree. It is the half (or more) that involves seeking health-care when you have a self-limiting condition, or when you're not really sick. When your aortic aneurysm ruptures, you'd best hope there is a board-certified vascular surgeon with 15+ years of little-to-no-pay training and experience nearby to fix it.

Expand full comment

Aaron and Thom, Walmart and CVS face the same increasingly restrictive laws as everyone else.

Grant, I didn't say health was never relevant.

Eric, most other kinds of professionals could not prevent publicity about their ineffectiveness.

retired, most studies probably compare with general practitioners.

Andrew, thanks, fixed.

Expand full comment

I think the first link there should probably be pointing at


rather than


Expand full comment

I agree with everything but this,

Medicine is not about health...Have you ever been really sick, or suffered from severe chronic pain? Trust me, in that situation, medicine is about health! I agree that many times it may not be, and the heuristic of assuming high-status people are more competent may not be useful in the medical field, but a lot of really sick people couldn't care less about anything but getting better.

Of course for voters, medical policy isn't about health.

Expand full comment

Doctors would go ballistic if a part of major health reform was to allow more physicians assistants and nurses to do things. I guess the truism is when an industry insiders are designing the policies for its improvement, you basically increase costs, as opposed to better outcomes. This is true for medicine, education, and perhaps various social services, maybe even the military. They try to focus metrics on inputs (amount spent) as opposed to outcomes. Just good old effective special pleading--but subtle.

Expand full comment

Indeed, CVS's 'minute clinic' program is a step in that direction. I'd say 'zero momentum' is at best an overstatement and at worse the result of insufficient investigation.

Expand full comment