Unbiased Analysis of Today's Healthcare Issues

Nearest doc: 200 miles

Written By: Jason Shafrin - Jul• 26•06

A very interesting book I recently came across is Arctic Village by Robert Marshall.  The book recounts the author’s two year stay in Wiseman, Alaska during the 1930s.  Wiseman is a town (if you could call it that) located above the arctic circle and is made up of less than 200 people.  The book details the economic, communal, sexual, and recreational life of its residents in detail and is packed with informative statistics and photographs of daily life.  I certainly recommend it for those who want a taste of life on the frontier.

The book’s section on health care is especially interesting.  The only means to get to an actual doctor or hospital is to fly over 200 miles to Fairbanks.  Home remedies and pseudo doctors are the major means of treatment on the frontier, but the general store does contain some basic household medical items such as gauze, peroxide, iodine, etc.).  Epidemic diseases, however, are generally not a problem in Wiseman since for 8 months of the year the temperature is below freezing. 

More recently, Matt Berman and Andrea Fenaughty (2004) have conducted a study looking at how healthcare quality in western Alaska can improve through telemedicine.  Most individuals only have access to a Community Health Practitioner (CHP) who have significantly less training than even a nurse practitioner or physician assistant.  Patients who need specialty care are flown to Anchorage.  The telemedicine technology allows doctors in Anchorage and CHPs to view pictures of an injury or a part of the body and simultaneously discuss treatment over the phone.  The doctor in Anchorage can make a more accurate diagnosis than if the consult was simply over the phone, and this may reduce the need to fly from the rural area to the city for treatment. 

The authors analyze the compensating variation (CV) of a visit to the CHP clinic and a physician visit in Anchorage.  The CV measures the change in utility for each type of visit after the telemedicine implementation for the area.  The authors find a CV increase of $41.30 at the CHP clinic after the telemedicine implementation, and a CV decrease of $8.70 for the physician visit.  This makes perfect sense.  Telemedicine makes the CHP more valuable since they now have better access to medical expertise from the city; as the value of the CHP visit increases, its substitutes (the physician visit) falls in value.  In Wiseman in the 1930s, the only means of communication was via telephone; giving far-away doctors access to photos greatly increases the quality of care these frontiersmen (and frontierswomen) receive. 

Berman, Fenaughty (2006); “Technology and managed care: patient benefits of telemedecine in a rural health care network,” Health Economics, Vol 14, pp. 559-579.

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