Map of life expectancy at birth from Global Education Project.

Thursday, January 14, 2010

Getting Specific

Just in time for our needs here at Stayin' Alive, Katherine Baicker and Amitabh Chandra in the new NEJM (subscription only, alas) lay out exactly how cost effectiveness analysis intersects with the problem of universal coverage. Beginning with the premise that resources are finite, and that spending more to give more people more expensive health insurance means we have to spend less on other things, they show some clear tradeoffs.

Suppose we had $180 billion a year to spend on expanding health insurance. (That may seem like a lot but it's a heck of a lot less than we're spending on wars right now.) Right now premiums for employer-provided individual health insurance in the U.S. cover a wide range. The median is $4,200 a year, $3,500 is the 25th percentile, and $5,100 the 75th. With a $6,000 policy, you could cover 30 million people; with a $3,500 policy, more than 50 million people could be covered. In other words, you don't get universal coverage, or you do.

So, what do we give up by opting for less expensive benefits? If we concentrate on providing care that gives more benefit for the dollar, not much. Maybe nothing. You might be surprised by some of the following cost-effectiveness comparisons.

Giving people with HIV anti-retroviral therapy costs less than $100,000 per QALY gained. (Actually I would imagine quite a lot less although they don't say exactly how much.) On the other hand, giving a generic statin to women under 45 who don't smoke -- a much cheaper drug, just a few dollars a month -- costs more than $500,000 per QALY. It might surprise you that liver transplants for people with an autoimmune disease of the bile ducts is also quite cost effective; whereas coronary artery bypass grafts, which are very commonly performed, aren't so great.

So there's just no way around it. If you want to keep health care costs finite, and thereby cover more people -- presumably everybody -- you can't pay for every damn thing. You need to ration. Not on the basis of what you think the worth is of any individual, but on the basis of the benefit you get for the money. That is the fundamental misconception driving the absurd public debate about this issue.

In fact, if you think about it, people with HIV are often stigmatized. A disproportionate number of them have addiction histories, have spent time in jail, and have other chronic diseases including mental illness and therefore are disabled. Yet cost effectiveness analysis says we should treat them before we start to think about CABG for middle-aged executives. We're saying that everybody's life and health is equally valuable; we're trying to get the most for everybody.

Both justice and liberty demand it. There is no tradeoff, no contradiction, on that basis. Now, is there a politician in this country who has the courage to get up and say that?

1 comment:

roger said...

apparently not, in answer to your question.

you do explain the whole thing very well. i suspect that those opposing "public health" aren't interested in clarifying the issues.