Somebody Has to Pay: No Way Around That

Some people are surprised that their doctor would charge them for email replies when they take more than a few minutes to prepare. One patient said (“Your Doctor Replied to Your Email. That’ll Cost $25,” Wall Street Journal, March 8, 2024):

“Patients like me who are complex patients, we require a lot of interaction,” says Falandys, who is a disability advocate.

“It just feels a little intimidating when you open the portal and the first thing it says is ‘be aware, we’re going to bill,’” she says. “We have to send these messages and we shouldn’t have to think to ourselves, ‘Should I send this?’”

The economics is simple. When a resource is used, somebody necessarily pays. We are unfortunately not in the Garden of Eden. Time is a scarce resource because it is not infinite and has alternative uses. Instead of answering emails, the doctor could spend time seeing another patient (which we would call a customer in economics), continue reading an article in a medical journal, get home earlier to see his children, or simply relax. (One can imagine the doctor reading Anthony de Jasay’s The State on a hammock near the beach, as shown on the featured image of this post.) The value for the doctor of what he (or she) would most prefer to do instead is the cost of the email. Note the concept of “opportunity cost,” which is what every economic cost is. (If the doctor is on an employer’s time, his cost or part of it will be shifted to the company’s; but let’s keep our model simple and ignore that.)

Somebody has to pay the cost of the doctor’s time: the doctor himself, or the customer, or the insurance company, or a third party such as the taxpayer. The only problem is who will pay or who will pay which part of the cost. It is the same with any supplier. Sometimes a supplier renders a “free” service, but it is always paid by somebody. Your appliance repairman does not charge you when replying to your infrequent emails: it’s a small goodwill gesture or marketing cost to keep you as a customer.

The market for medical services has its own peculiarities such as legally restricted competition (one way to see this is when it’s the customer who gives Christmas gifts to his supplier), matters of limbs and death, and the omnipresence of third parties such as insurers. But this does not change the reality that resources are scarce and their use has a cost that somebody must pay.

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The featured image is a courtesy of DALL-E, ChatGPT4’s artist colleague. The bot struggles to draw human figures, especially on hammocks with drinks.