Medical technology

Robert Bradbury rbradbur at hardy.u.washington.edu
Tue Jun 2 04:49:13 EST 1992

In article <9206012230.AA26969 at rust.zso.dec.com> french at RUST.ZSO.DEC.COM writes:
>In reply to: Bradbury at sftwks!bradbury at uunet.UU.NET
>> I commented that the wealthy spending money on excessive health care
>> might not divert resources from other areas.
>Larry replied:
>The point is that shifting a massive amount of resources to the
>health care industry will not necessarily improve the quality of
>life.   Those resources must come from somewhere and, presumably,
>the other sectors of the economy serve to improve some facet of the 
>quality of life.  For example, what about the family that raids little  
>Johny's education fund to pay for grandpa's stay in a nursing home?
You are up against sociological phenomena here.  The family could attempt
to take care of grandpa at home and avoid the nursing home cost.  Some
families spend their money to have others take care of grandpa because
they are unwilling to do it themselves.  Others because they are unable
to do it themselves.  Now, if the family thinks things through in advance
they will set up living wills and determine with grandpa when his quality
of life is sufficiently diminished that it should be ended.  If
that can't be arranged in this country then a family trip to Europe
might be required.  In any case it shouldn't require dipping into Johnny's
college fund to a large degree.  (We presume grandpa has a life insurance
policy of some kind)  Of course problems can arise if one waits too long
to make these decisions, but we are talking about how it "should" be
setup, are we not?  Given what we know about aging process and its
potential costs should not every middle-aged child be having these
discussions with elderly family members while they are still able to
do that?  The problem really is that most people do not want to think
about death and let it slide until grandpa can't make decisions for
himself and then because the family members can't bring themselves
to "kill" grandpa (who is already dead) they end up bankrupting themselves
or society.

>I commented that health care taxes would be unacceptable.
>Larry commented:
>It would be absurd to tax basic health care - you can buy a lot of good 
>health care for a reasonable amount of money.   What should be taxed is
>health care that does not provide good value.  This would serve two purposes.
>First, it would redirect resources to other areas of the economy that
>serve a more important need.  And second, it would send a clear message
>to the public that not all medical procedures provide an equally good value.
One of the real problems in medicine right now is that we can't figure out
what "good value" is.  I think I saw a report saying we are already spending
$150 million on studies to try and determine what treatments are cost
effective.  Politicians cannot now enact laws which reflect something which
makes correct scientific sense.  (Energy spending is in reverse order from
what DOE studies show would be the best way to fulfill our energy policy.)
Given their record how likely is it they would get the "wasteful treatments"
list correct?  As others have pointed out, probably all proceedures have a
correct use in some cases.  How do you vary the tax with the "usefullness"
of the proceedure?
>I said:
>> You get the money indirectly anyway by taxes on doctors salaries, hospital 
>> profits, equipment manufacturers profits, etc.)
>Larry replied:
>Essentially, you are saying that we should let market forces determine
>the price of all goods and the problem of resource allocation will take
>care of itself.  There is a problem with this policy.  What happens when those
>who control most of the resources have an uncontrollable desire to spend
>those resources in a way that is socially irresponsible?  

Well, that is the system you have now.  The elderly are spending their
children's future though government borrowings.  The reason things are
messed up now is that you don't have "real" markets.  Your company or
the government pay for the insurance of most people who have it and
in this kind of system most people are going to milk it for everything
they can get.  There is no feedback loop in that system, no disincentive
for people to consume less as costs go up (because they don't see the
costs).  If everyone had "basic" coverage for all of the stuff we cannot
avoid and then had to pay for insurance based on their expected consumption
(just as people who have a history of accidents pay more for auto insurance)
the feedback loop should result in decreased consumption due to people
becoming more responsible for their health.  [Please note that I am *not*
saying that we should require people with genetic diseases or pre-existing
conditions to pay more.]

If you want to tax something, why don't you tax those things which make us
unhealthy?  Cigarettes are about $4.00 a pack in Canada now, a drink is
something like $8.00 in Sweeden and of course if you really want to make
a difference tax fat (milk-fat, meat-fat, oils, butter, etc).  These taxes
would act as very directly to reduce consumption of those things known
to result in high health care expenditures.  This would be much easier
than trying to tax the "wasteful health care expenditures".

>Is it good policy to allow the elderly to squander their money and their
>children's money on expensive health care that provides little or no social 
>benefit?   Perhaps you can't stop someone from squandering their money, but
>you can and should tax certain health care procedures as luxuries.
Each of us has property rights to our money.  If the elderly person wants
to spend it on his/her health care they are free to do so.  (I've started
having my silver/mercury fillings replaced with gold ones as they wear
out for health concern/cost effectiveness reasons -- are you going to tell
me that I shouldn't be "wasting" my money on this?!?)  None of the children's
money should be involved.  No family member should be obligated to pay for
the health care of another family member.  If our laws aren't set up that
way in some states then they should be changed.  Now, at the same time
society should adopt a position that we (collectively) should not be
mortgaging our children's future to take care of people who need health
care now.   For people who are stubborn enough to want a natural death
no matter what their condition, society should apply *strong* pressure
to ensure that they have insurance to cover that.  For those people
sensible enough to choose a "graceful exit stage left" when their
minds or bodies are in hopeless condition, society should adopt
social and medical structures which allow that option.

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