Back to the Future

Princeton economist Uwe Reinhardt thinks that with regard to healthcare, we are every bit as progressive as the Code of Hammurabi, from almost four thousand years ago;

The code is said to have informed both Jewish and Islamic law. Remarkably, it has echoes also in modern health policy in the United States.

Among the 282 laws in Hammurabi’s Code, nine (215 to 223) pertain to medical practice:

215. If a physician make a large incision with an operating knife and cure it, or if he open a tumor (over the eye) with an operating knife, and saves the eye, he shall receive 10 shekels in money.

216. If the patient be a freed man, he receives five shekels.

217. If he be the slave of someone, his owner shall give the physician two shekels.

Though their malpractice law was a bit harsher than ours;

218. If a physician make a large incision with the operating knife, and kill him, or open a tumor with the operating knife, and cut out the eye, his hands shall be cut off. 

 But, his point is clear with regard to private health insurance, Medicare and Medicaid; our governments pay different fees to medical professionals for the same services, depending on how the patient is classified;

... our modern, differentiated payment system for health care does resemble the Code of Hammurabi in some respects.

....Physicians clearly understand this relative valuation being signaled to them. According to a recent estimate, almost a third of American physicians are unwilling to accept any new patients covered by Medicaid. 

Which the American Care Act (aka, Obamacare) proposes to change...for all of two years;

I note that under the Affordable Care Act of 2010, the federal government is willing to pick up the added cost of raising physician fees paid by Medicaid for primary services to equality with the usually higher fees paid by Medicare for those services. That provision, if carried out, would more than double such fees in six states, including New York and New Jersey.

Alas, for the states, the federal government will pick up the bill for this policy only during 2013 and 2014. It is anybody’s guess, therefore, how many states will retain the more generous and to them costly payment policy after 2014. 

Incentives matter, even after all these millennia.