RENEE MONTAGNE, host:
Economists say one reason health care is so expensive is that it's not set up like a traditional market. It's full of peculiarities. Our Planet Money team examined one key player - doctors - and asked a simple question. In economic terms, what role does the doctor play? Chana Joffe-Walt and David Kestenbaum have our story.
CHANA JOFFE-WALT: David, I think I've got it.
DAVID KESTENBAUM: All right. Go ahead.
JOFFE-WALT: Here's my proposal. Doctors are like your mom. Economically speaking, they've got your best interests at heart. They take care of us, deliver our babies, they check our ears when we're little.
KESTENBAUM: They see us naked.
JOFFE-WALT: Exactly. Mom material. Here, let me show you.
Unidentified Woman: (Mother) Hello?
JOFFE-WALT: Hi, ma.
Unidentified Woman: Hey, hon.
JOFFE-WALT: How are you?
Unidentified Woman: I'm okay. How are you?
JOFFE-WALT: I have a really bad headache.
Unidentified Woman: You do?
Unidentified Woman: Sorry to hear that.
JOFFE-WALT: My throat has like been killing me all morning and I'm just tired all the time.
Unidentified Woman: For your headache it would probably help to take some Tylenol. I know you don't like taking things, but it would be a good idea for you to go and get some.
JOFFE-WALT: See? She listens, cares, prescribes.
KESTENBAUM: Good, Chana, good. Yeah, that's cute. Yeah, the analogy kind of works, especially since I've been paying your mom to put up with your whining.
(Soundbite of laughter)
JOFFE-WALT: Yeah. So my mom theory runs aground there. My ma does not get paid.
KESTENBAUM: But doctors do. In fact, most get paid for every single sale, every surgery, every procedure. So I have another proposal. The doctor is a salesman. Just like this guy, Mo Azalo(ph), who sold me sunglasses on the street.
Mr. MO AZALO: This is seven dollars, sir.
KESTENBAUM: Now, can I haggle and give you six bucks instead?
Mr. AZALO: Six bucks? How about $6.99?
KESTENBAUM: All right, $6.99. Deal.
CHANA JOFFE-WALT: Wow, David. Tough bargainer.
KESTENBAUM: I saved a penny.
JOFFE-WALT: Okay, look. This is what makes doctors such strange economic actors. Nobel Prize economist Kenneth Arrow, he wrote this in the 1960s, how crazy this is, that doctors have a financial incentive to act as a salesman. Then that is why we have things like the Hippocratic Oath, to remind them to act more like your mom.
So I asked several economists who, economically speaking, does the doctor resembles most. And they all named the same one profession.
Mr. ARI COHEN: My name is Ari Cohen. The name of the shop is ABC Erikson and we are the car doctors, if that's how you want to call us.
(Soundbite of laughter)
KESTENBAUM: That's right. Your doctor is an auto mechanic because, because of this one big issue that you don't get with the mom or the street salesman - the information problem.
JOFFE-WALT: The information problem. For example, the other day this guy comes into Ari's shop, good guy, he's got a Buick. He tells him, every time I step on the brakes, the entire steering wheel, the whole thing in the car shakes. And Ari says, oh, no problem, really simple. Three hundred and twenty-dollar fix. But then...
Mr. COHEN: And we checked a little bit more into it and we find out that the wheel bearings have some play and the axle's out of balance. They bent or the shaft is not aligned right.
JOFFE-WALT: And how much more is that going to cost?
Mr. COHEN: It varies on the car, but like on a Buick, the wheeling bearings, they a little bit expensive, so it can be like another thousand dollars.
KESTENBAUM: We've all been in this situation. You take the car in, Ari's a good guy, but you don't really know. We as customers, we have an information problem.
It's the same with health care. Patients can't always judge whether we need surgery. We don't know what procedures are necessary and which aren't. And doctors, they don't always know what drugs or what treatment works best.
JOFFE-WALT: And this is why when you hear proposals for how to fix health care, you hear talk about changing how doctors are paid, or that we need more research so you don't have these information problems. So the doctor is in this strange spot and unfortunately that is not the only strange thing in this market. You are strange.
KESTENBAUM: We are strange, the consumers. If you think about the guy with that Buick, he may just decide his car is not worth fixing. But if you take your grandmother to the doctor, you'll pay $10,000, $50,000, whatever, because you love her.
JOFFE-WALT: And because you're insured. But that's for another time. What happens when your half-mom half-salesman mechanic doctor has an appointment with your price-is-no-obstacle life-loving grandmother?
KESTENBAUM: David Kestenbaum.
JOFFE-WALT: And I'm Chana Joffe-Walt, NPR News.