National health care [was Re: Medical technology and cryonics]

DGS4 at psuvm.psu.edu DGS4 at psuvm.psu.edu
Thu Jun 4 06:56:34 EST 1992

In article <196 at sftwks.UUCP>, bradbury at sftwks.UUCP (Robert Bradbury) says:
>I submit that if they understood the system and where it is going they
>would agree with me.  National Health Care such as is found in Canada
>and other countries perform rationing and politically modified cost-benefit
>tradeoffs but in many cases these "facts" are not clearly explained.
>The doctor simply says, "This isn't treatable" or "You will have to
>wait 8 months for treatment" instead of "We cannot afford to treat you."
>Proposed/enacted changes to the health care systems in Oregon and Vermont
>seem to indicate that people are discussing and deciding that when funds
>are limited that 100 of treatment X may be better than 3 of treatment Y.

One of the problems with the cost-benefit approach is that it is not
technically possible to count the benefits very accurately.  That's why
Oregon only used it as a guide and focused on a political, democratic
decision to determine how they would pay for poor peoples' health care.

A second problem is that, in fact, if you use cost-benefit analysis
you may find that people place an extraordinarily high value on those
final days of life.  It makes economic sense.  If you only have 10 days
to live, a medical treatment that extends your life by 1 or 2 days can
be very valuable to you.  Thus, there's no guarantee that your cost-
benefit approach would reduce the use of high-tech interventions that
only extend life marginally.

>Now, unlike some politicians (and other respondees :)) I will propose an
>alternative and let you take shots at it.  I would argue that it is
>"morally wrong" to require future individuals to pay for youur choices in
>life.  I would also argue that it is unjust to consume more than your "fair
>share" of health care.  Your fair share would include coverage for
>those things which can happen equally to all of us (primarily accidents,
>communicable diseases and genetic defects).  These should all be covered
>under "national health care".  Many other diseases (most heart disease,
>cancer, diabetes) appear to be related to lifestyle decisions (smoking,
>lack of exercise, poor diet, etc.) because their incidence shows a high
>correlation with the affluence of the country.  For these diseases you
>would be lumped into a group of people of similar risks (known as assigned
>risk pools in automobile insurance) and insurance costs would be based
>on the expected health costs associated with your lifestyle.   You and
>the other individuals within these assigned pools could decide how much
>coverage you would be willing to pay for.  If you could "prove" a genetic
>cause for these "diseases of affluence" you could receive a reduction
>in your insurance payments.  Companies would be prevented from paying
>for added insurance costs associated lifestyle risks to allow people to
>realize the full costs of their "choices" and have an incentive to
>be more concerned about their personal health.

Your proposal is exactly what insurance companies try to do now.  There
are two main problems with it:

1) It doesn't work.  It is impossible to distinguish how much of a person's
health problems and health care costs are attributable to behavior, genetics,
randomness, provider abuse, etc., etc., etc.  We spend about 25% of our
total health care dollars trying to determine this now, and we are no
closer to figuring it out than 20 years ago, when we spent a far smaller
amount.  Every dollar we spend trying to find this "health care holy grail"
is another dollar we can't spend on medical care, or education, or defense, or
anything else we want.

2) To be able to do it, if you could do it, would require an extraordinary
invasion of privacy.  Obviously, the government or insurer could not trust
me to tell the truth about behavior (I would have great incentives to
lie), so they would have to keep track of my smoking, drinking, exercise,
genetic characteristics, and so on.  I really do not want that, and I don't
think many other people do.

What's the solution? Do what has been proven in other countries and other
areas to work.  If you want to deter use of unhealthy goods, you use user taxes
to raise their relative prices.  Look at how smoking has dropped as taxes have
increased.  User taxes, combined with education (examine the recent drops in
smoking among CA youths as a result of a large educational campaign) are a much
more humane and effective way of addressing health behavior problems than
trying to deter behavior through income mitigated rationing.  Don't forget in
your model it would be the poor smoker who wouldn't get the lung transplant.
the rich smoker could pay for it.

If you want to have more equal access to some basic level of health care
then you define what that includes through a political process (which might
include some of your cost-benefit calcuations) and collect money for it
through a progressive income tax.  As many nations have shown, you can
design your program to fit your nation's particular problems and structure.

If you want to control costs, you have global controls on physician and
hospital costs, and any other costs that you have included in your NHI
system.  Within those global controls, those who have the medical expertise,
primarily physisicans have to determine how they will allocate the scarce
dollars that have been budgeted.  The global controls are determined through
a national, state, or local political process.

This system doesn't give you the perfect health care system, but it works.
If we continue wasting our time trying to find the ideal health care system,
we'll never get a system that meets basic needs.

Economic science tells us that competitive markets can fail,
especially when there is uncertainty, information assymmetry, and
monolpoly providers.  We continue to seek a system that gives people
the market signals that identify the costs and beenfits of health
behaviors, yet we rest our arguments on the key assumption that those
signals are visible.  They are not.  As Evans and Barer note in a recent
article in Health Affairs, once you assume away these distrotions in the
competitive environment, "one can use the rhetoric of efficiency to
legitimate the competitive ideal."

Dennis G. Shea, Penn State <<USUAL DISCLAIMER>>
"I believe that there is social and psychological justification
for significant inequalities of incomes and wealth....But it
is not necessary....that the game should be played for such
high stakes as at present."  John Maynard Keynes

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