Where the Market for Plastic Surgery Doesn’t Work

Where third-party payers foot the bill, of course. How could you doubt. "Health insurers are required by federal law to cover reconstructive breast surgery after mastectomies." Yet a New York Times article finds that:

Even as promising new operations are gaining traction at academic medical centers, plastic surgeons often fail to tell patients about them. One reason is that not all surgeons have trained to perform the latest procedures. Another reason is money: some complex surgeries are less profitable for doctors and hospitals, so they have less of an incentive to offer them, doctors say.

Comments (2)

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  1. Joe S. says:

    There is a simple lesson here: When patients pay for their own care, providers compete to meet patient needs. When third parties pay, providers satisfy their own needs.

  2. Neil H. says:

    Joe, the problem is not so much the third-party payer as it is the inability of the doctor to freely price his/her services.

    When doctors deal directly with paying patients, they can set any price the market will bear for their services. In that case, there is no perverse incentive to conceal procedures patients would have been willing to pay for.