Why We Must Ration Health Care
nytimes.com
nytimes.com
You can select an insurance policy with rationing and a $10M lifetime benefit, and I can select an insurance policy without rationing but with a flat $1M lifetime benefit. The system we have now is not free because governments dictate what kind of policies medical insurers can offer, preventing consumers from making many of these types of choices.
When we decide that one size fits all, then the only choice is to have politicians and bureaucrats making these decisions for everyone.
When you make a decision about what your life is worth, that seems morally sane. When someone else makes a decision about how much your life is worth, that seems morally objectionable. Only free markets allow us to mostly avoid the latter choice.
I'm vegan (which reduces heart disease and cancer risks), I don't smoke and I exercise moderately. However the pool of risk into which I am assigned also includes people that eat large amounts of cholesterol, smoke and don't exercise at all.
In this article the author explores the topic of ranking treatments by their effectiveness in terms of QALYs, but a large amount of chronic and acute illnesses can be avoided by improved diet and exercise. As such any system of reform should look at a large piece of education and social change to encourage this.
It's unacceptable to not give people treatment for acute problems. However no-one is talking about how a lot of those acute problems are made much more likely by some lifestyles than others.
If you buy car insurance you pay more or less based on your risk factors such as age, experience, points on your license, etc. If people choose to increase their risk for health issues than it seems unreasonable that the rest of us should have to pay for their lifestyle choices.
It also seems like any healthcare reform should attempt to encourage people to reduce unnecessary burden on the system. That might make it more possible to increase the amount available to spend treatments for people with terminal illness, because less our of GDP would be spent on treating unnecessary chronic or acute illnesses.
(Sorry if this post makes you get all existential for a while. Seriously.)
The author(1) looks at the reasoning behind healthcare rationing and suggests that it isn't as bad as it appears. Essentially he suggests that it's easy to find media-friendly stories of how rationing healthcare screws some hardworking soul, but that doesn't mean it isn't a good idea.
He look at how we already put a cost on life by limiting the budgets for things like consumer product safety standards, and the amount spent by transport agencies on safety. He argues there is an objective measure that economists have been using for years (quality-adjusted life-year, or QALY) to assess the cost-effectiveness of treatment and that the US government could use this for effective healthcare reform.
He goes on to point out that while it's easy to point out the places in universal health-care systems where people are excluded from treatment because the system tells them it isn't available, it's much hard to find when people self-deny treatment for fiscal reasons. He cites the case of a woman in the U.S. without health insurance who didn't take her blood pressure medication because she bought food for her family. As a results she died in the ER with a brain hemorrhage.
He also compares the system in the U.S. to those of the UK, Canada and Australia, and suggests that health-care reform in the U.S. would not have to be modeled on those systems but could even be modernized to a system that suited the American temperament better. The Australian system, for example, provides universal healthcare, but also allows citizens to buy into private healthcare schemes which do not restrict treatments.
This is just a poor summary and an extremely interesting article.
(1) Peter Singer is professor of bioethics at Princeton University. He is also laureate professor at the University of Melbourne, in Australia. His most recent book is “The Life You Can Save: Acting Now to End World Poverty.”
As far as I am aware, we do not ration health care in Canada - if it is available and justified, we use it. Why? Because unlike the United States, the Canadian government doesn't pay $54,000 for a few pills. Yes, it's true, our public health system pays far less (sometimes over 70% less) for the exact same drugs from the exact same drug companies.
The problem here is that there is no bargaining power in private health care. The providers don't really care how much they pay for drugs, because any cost is simply passed onto you, the consumer. As consumers you have very little recourse except to take it. A large, centralized health care system has the bargaining power and the incentive to push drug companies for lower and lower rates.
Having now seen how much Americans pay for health care, and how little they get for their money, I have a hard time imagining why people continue to support private health care at all.
I fear that one of the things we get is to subsidize the world with respect to drug innovation. Pfizer, et al, put up the money to develop drugs knowing that they can gouge unwilling customers in the USA (all health care buyers are unwilling--that's why health care isn't a free market).
If the US starts putting ceilings in, the one big side-effect may be a reduction in research.
Honestly, I think that capitalism works for a lot of things -- health care not being one of them. I think the idea of a "profit margin" on health care is prima facie ridiculous.
Has anybody seen any research on how much of the difference between health care costs in the US and Canada/Europe are accounted for by the difference in drug prices?
I also expect that international cooperation on the approval process for new drugs might reduce development costs. Perhaps the UN might actually make itself useful and form something like an international version of the FDA and have member nations agree to abide by its decisions.
The world would be better off without American drug companies dominating the market, even if it meant no Viagra.
> the vast majority of the research goes into treatments rather than cures, because the former makes money and the latter does not.
[citation needed]
This sort of conspiracy-theory bullshit is really annoying because it fails even the most basic logical analysis. If company A develops a treatment for a disease then it will be able to make more over the long-term than company B which develops a cure for a disease. But if company A develops a treatment and two years after it gets through testing company B comes up with a cure for that same disease then company A is going to lose a boatload of money. The only way this would work is if these companies were acting as a colluding cartel, and so far all evidence seems to indicate that the companies hate each other even more than we hate them.
> The world would be better off without American drug companies dominating the market, even if it meant no Viagra.
I happily invite you to try to live the remainder of your life eschewing treatments developed by American drug companies. Viagra may make a nice whipping-boy for your tirades, but you do know that it was developed when stage 2 testing for an angina drug revealed its more popular side-effect, right? Pfizer did not set out to keep aging baby-boomers smiling, it just happened upon it while actually trying to cure coronary artery disease.
It doesn't require a "conspiracy theory"; it's simple obvious fact: drug companies don't fund studies to develop and test drugs that won't be profitable. Tell me, why do you think they would pay hundreds of millions of dollars to develop and test a drug that won't make money? Your argument doesn't even make any sense; it requires that drug companies do something that is financially illogical.
One: Martha Angell says it's just a line of propaganda. From a review at http://www.amazon.com/Truth-About-Drug-Companies-Deceive/dp/...
"In The Truth About the Drug Companies, [former editor of the New England Journal of Medicine] Angell explains how a huge portion of the revenue generated by 'Big Pharma' goes not into research and development but into aggressive marketing campaigns to sell their product. She describes how, even though the drug companies claim that it costs them an average of 802 million dollars per drug to develop new medicines, that figure is obscenely inflated since it factors in marketing as well as expected interest the company would have received had they invested the money in the open market. Meanwhile, Angell says, most of the R & D work is done by colleges and universities funded by the government. There are also problems with the drugs themselves, Angell indicates, since a majority are 'me-too drugs', slightly modified versions of existing products which meant to address concerns of consumers most likely to spend money on pharmaceuticals..."
Two: Even if I were to accept the argument at face value -- which I do not -- what it's saying is that as an American I pay far and away the highest medical costs in the developed world, yet receive no better health outcome, and have no guarantee that my insurance will actually cover me when I get sick (rather than finding a way to reject me based on some technicality)... all in order to generously subsidize drug research for the benefit of the rest of the world. Now, I like to think of myself as a generous guy, and I used to work in drug research... but screw that. I'll take Canadian or Western-European-style healthcare, peace of mind, and a check. Then we can talk about how much of my extra money I'd like to contribute to erectile-dysfunction research.
A waiting list is rationing; a limited list of approved drugs/procedures is rationing; a ban on private insurance is rationing.
There are many accounts of Canadians seeking denied or long-waitlisted procedures elsewhere, usually the USA. Some examples are listed here with regard to court cases about provincial bans on private programs:
http://www.canadianmedicinenews.com/2008/01/is-universal-hea...
If the USA adopts the same national controls, an important safety valve for Canadians will disappear (and US citizens may find themselves medical tourists elsewhere).
Results for some diseases are worse in Canada, perhaps due to limited therapies and longer waits. Here's Dick Morris plugging his new book with some figures:
http://www.dickmorris.com/blog/2009/07/09/obama-will-repeal-...
In our new book, Catastrophe, we explain - in detail and in depth - the consequences the elderly of Canada are feeling from just this kind of program. Limited colonoscopies have led to a 25% higher rate of colon cancer and a ban on the use of the two best chemotherapies are part of the reason why 42% of Canadians with colon cancer die while 31% of Americans, who have access to these two medications, survive the disease.
Overall, the death rate from cancer in Canada is 16% higher than in the United States and the heart disease mortality rate is 6% above ours’.
It's Dick Morris, so I'm sure he's spinning and shilling, but there are tradeoffs inherent to single-payer cost-controls -- some people get worse care.
Wait, what? 42% of Canadians die, ok that kinda sucks if you have colon cancer. 31% of Americans survive implies to me that 69% ...don't. 69% chance of death vs 42% change of death...I'll take the 42% please.
I presume this is a case of sloppy blogging rather than deliberate manipulation, but this kind of nonsense does a disservice to the complexities of the healthcare and ageing debates. I would refer people to the Economist's extensive and sober-minded coverage of these complex issues - which has also been the subject of controversy and in fact makes profoundly depressing reading, but is a deal more informative.
BTW, as a European who has benefited extensively from the Euro model of healthcare growing up, it is more impersonal and less reassuring than my experience of American healthcare. But it's there for you most of the time, and you won't be forced into bankrupcty.
When government bureaucrats ration health care, the results can be a disaster. Take the grim story of colon cancer in Canada. Colorectal cancer rates are much higher in Canada (6.7 per 100,000). than in the United States (4.8 per 100,000.) And although 41 percent of cases in Canada prove fatal, only 34 percent in the United States lead to death.
Even though colorectal cancer is the second leading cause of death in Canada, the drug Avastin -- the standard treatment in the United States -- is not available to patients in Canada through the government health system. "What is going on in Canada is shameful," says Barry D. Stein, president of the Colorectal Cancer Association of Canada. "This treatment, which was finally approved last year in Canada and which was long overdue, is not reaching patients who are desperately in need of... a treatment which is the standard of care in the treatment of the disease."
My point is mainly there are lots of ways to ration -- dragging out both approval and access save money, at the margin, but also result in earlier deaths, at the margin. There are tradeoffs in any system. Some USians would like the Canadian system; some Canadians have to come to the US for treatments.
And especially with regard to the US system, there are big externalities and innovation effects. Canada and the rest of the world get giant positive externalities from the drugs and treatments developed first in the USA's expensive, competitive market. It may be economically rational to dilly-dally on advanced techniques when some other market is leading the way; or to drive a national hard-bargain to get drugs near the cost of production when the drug is already developed. But if every country lags, and every country squeezes all the profit out of medicine, the whole world will suffer from resulting the dearth of innovation.
I was feeling weird about a year ago, visited my doctor, and requested a metabolic panel and some blood sugar tests. A few weeks later, and about $10 out of pocket, I had my test results. (I paid about $200/m for health insurance at the time)
My Canadian friends tell me this isn't possible in Canada. The doctor simply won't order the tests for you because tests are expensive.
I'm curious as to whether this is widespread. If so, the Canadian health care system seems like the opposite of the American health care system. In the USA drugs are expensive but your insurance will pay for any sort of test. Indeed, doctors will over test you, or comply with any patient test request because insurance will readily reimburse them.
From what I know about Canadian health care, drugs are cheap, but doctors are discouraged from doing tests due to the cost. I'm curious as to whether this is an accurate assessment of the Canadian system...
While I have to admit since I moved to the US (from the UK) my physician seem more free conduct things like blood tests than the NHS they don't any more free about it than BUPA my private health insurance in the UK.
The main difference I see is that with my PPO insurance I'm free to willfully ignore my doctor's advice and take other actions if it suited me with the insurance footing a large part of the bill. That definitely isn't true in the UK (or on Kaiser actually).
While I feel I'm an informed consumer of health care, I'd still rather be in a system where I don't need to go outside the system because the system is capable of looking after me adequately.
And this is the crux, while it seems universal health care countries seem constrictive they provide for everyone. The real cost of being able to pick and choose your treatments, or take needlessly expensive treatment is insurance/medical costs that are beyond the budgets of 1/6th of the American population.
The tests did indeed show the beginnings of a problem that is correctable but is harder to fix if I would have waited until actual clinical symptoms showed up.
One problem with health care that is that the model of doctor as gatekeeper is not scalable. This problem will not go away with any sort of health care reform. There are simply too many humans in the world for there to be a reasonable patient to doctor ratio. You should be able to go into a booth at Wal-Mart and get a metabolic panel, celiac test, blood-born STD, and whatever else for between $50-$100. If something weird shows up you can schedule an appointment with a GP. The system now is the opposite, and is a waste of time for everyone involved.
Let's suppose drugs and medical procedures were not subsidized by any body. (Completely impractical (not a recommendation) but useful for this thought experiment.) What do you think would happen to the price of these drugs and medical procedures. People would pay for them if they valued them at their price.
In having people pool together money in an insurance body (of which there are currently many) you allow shared responsibility so that a disaster (theoretically) does not financially destroy someone. So now drug companies et al are indeed negotiating with insurance companies. Insurance companies have huge margins (nature of the business) and end up paying prices based on the value after margin. Because of this padding, prices go up.
Now imagine instead of a bunch of insurance companies you have one. This is public healthcare. Prices will be very high, but it won't look like that to the consumer because it is a public cost.
Furthermore the "ask Canada" argument from the privatize-it side points out the reduced wait-times and increased specialized innovation that occurs in America.
No one's arguing that the way it is now is perfect, but a public system in America is a scary thought.
The government does not need to make a profit on healthcare, which is why people are turning to them. (Plus, we've seen this system work in other countries. The US will not be the first country to give everyone healthcare; it will be one of the last.)