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This page explores the claims that in the market consumers would decide what care they were given, and that health care is currently organised for the benefit of the medical profession. It examines the way in which decisions about care are actually made in the marketplace. It does so by using examples.


Marketplace medicine is promoted on the basis that the consumer decides on the care provided and so determines the type of service and the quality of services. Unfortunately this simplistic model does not hold up. The health care consumer is all too frequently incapable of filling the role of effective customer and when physically and mentally able to do so considerable guidance may be required.

There are other parties who have a major interest, including the community/government, and the health professions. The latter have a responsibility not only to the community but to the patient, well beyond his demands. The market simply introduces discordant forces into this difficult and ethically confronting situation.

Psychiatric care for children is an excellent example of the way in which market forces have created havoc in the health care system. The US community in the 1980's was particularly disturbed both by increasing psychological problems in children and by substance abuse in this group. The government responded by increasing the insurance cover for children in these areas. Children were covered for hospital care for 6 months instead of one. In practice children rarely need hospitalisation for psychiatric problems and prolonged hospitalisation is usually harmful. The corporate community immediately identified the opportunities this presented. The paradigms which they used saw marketing as the prime recipe for financial success and this was a market which would respond well.

Corporations like National Medical Enterprises or NME (now renamed Tenet Healthcare) set out to generate a market in this area. They advertised widely, books were written, seminars were held, school fairs were held and councilors were put into schools. The increasingly anxious parents were urged to bring children for evaluation. Here they were persuaded to admit their children to hospital. Bounty hunters were sent into the community to persuade anxious people or their children into hospital. A vast market was created where in reality there was none.

Large numbers of children were needlessly admitted to hospital for prolonged periods a and kept there often against their wills. Costly care was then supplied to people who did not need it - hardly an efficient use of limited resources. At $1000 a day for up to 6 months each young person was a gold mine. Several corporate empires were built on this sort of psychiatric care. The share market was ecstatic. A delusional system was developed to support these activities using market theory. Many participants did not consider for a moment that they were indulging in criminal activity. The newly wealthy corporate leaders were feted and admired. They became philanthropists. Public buildings were named after them.

This experience shows that If the consumer's model proposed by market advocates like Samuel and Wooldridge in Australia actually gave consumers real power then providers would soon learn to create a demand by marketing profitable "products" to consumers. Consumers would use their market power to force purchasers and providers to supply this new product for them. This process is hardly efficient! Similar commercial forces are likely to have generated the current overdiagnosis and over treatment of attention deficit syndrome. As in the case of psychiatric care it is citizens and not government who have identified the problem and taken to the courts to rectify it.


Professionals unlike "service providers" have a wider responsibility to the community and to the well-being of their patients. The patient does not decide what treatment is given. This is a joint decision where two parties must agree. It is not a market where patients buy services. Professionals do not provide services which are not needed They will not provide a service to a patient or to the community in response to a quirk or community fad. Fringe "medicine" caters to this "market".

A patient once came to me requesting a circumcision - the reason given was that he had lost his foreskin on a bet and needed to fulfill his bargain. I did not see myself selling a product, "circumcision" on the market and refused. Like other specialists I have periodically refused to carry out procedures which both the patient and their doctor thought indicated. I did not accede to demands which were not in the patient's best interests. I was not "selling" a product and the patient did not have a right to purchase a service which I provided.

African men and Moslems have cultures which require pre-adult circumcision. They dare not be found uncircumcised in adult life. Some are done with an unsterile knife in the bush. In these situations, even though there were no medical indications I have happily obliged as it was in the interest of the patient that it be done more safely.

Market purists would consider this professional arrogance and a breech of market principles - the equivalent of denying women access to a men's club or refusing to serve an aboriginal customer. If I was marketing circumcisions then I had no right to discriminate on the basis of race or belief systems in this way.

In contrast I consider that I was exhibiting professional responsibility. I would be breaching this responsibility if I carried out a procedure which placed someone at risk simply because they demanded it. I was acting responsibly when I provided this service to people who did not need it medically because this prevented them from a greater risk.


The particular pressures in any market system impact on care and it is wishful thinking to suggest that by tweaking contracts or using consumer's demands you can control what happens. The situation is far too fluid.

Serious burns are a common medical problem, but not a particularly common problem in the community. They are catastrophic events when they occur but advertising cannot be used to increase the size of the market. Maintaining a burns unit is very costly and not profitable. The patient flow is related to weather so is seasonal. Unlike tourism the unit cannot be closed in the off season. Because of this for profit corporations like Columbia/HCA simply do not run burns units. They do not make money.

Burns are a terrible tragedy. Years of painful and painstaking plastic surgery is needed for each patient. These patients tug at the heart strings of every person. The community willingly donates money and not for profit hospitals provide these money losing services. It is conditions like this which make market models like that proposed by Samuel so scary. We can picture a cohort of managers and businessmen who know nothing about burn care haggling over competitive contracts for the provision of burn care with minimum expenditure. The provider offering the cheapest option wins. The provider is then forced to squeeze the care given by doctors and nurses in order to make the profit on which its survival and the the profit for its shareholders depends.


Economists and politicians claims that services are organised for the benefit of professionals. They are partly correct. The professionals are the people who provide the service to the community and if an efficient community service is to be provided then the needs of both should be considered. It is not possible to provide highly skilled services in every community hospital and maintain standards.

Until recently doctors have been in short supply, particularly in government services. Even today there are shortages in the country. The concentration of scarce resources and the people who provide them has therefore determined where and how services are provided. With the exception of wealthy competitive private systems health care resources have always been stretched to meet need rather than demand. It is hardly surprising that the services were set up to make it easier for doctors to meet the community's needs. Its called efficiency! In contrast the structuring of services along funding systems has created internal stresses and inefficiency. Structuring them along a series of competing market roles as suggested by Graeme Samuel can only create more difficulties.

It is easy to use the market retrospectoscope to claim that organisational structure is based on professionals looking after themselves. As a professional I have some difficulty in seeing professional self interest (as contrasted with streamlined service provision) as a prime determinant of the structure of care but concede that it does happen sometimes. Efficiency and taking services out to the local community are not always compatible objectives. There are trade offs including safety, cost, and the most efficient way to organise particular services.

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This page created October 2000 by Michael Wynne