Map of life expectancy at birth from Global Education Project.

Friday, October 23, 2020

Health Care 101 Continued: The allocation problem

We often hear sentiments to the effect that human life is infinitely precious, that you can't put a price on human life. While most people probably think this instinctively, it is conservatives, and particularly religious conservatives, who are most likely to try to apply the concept in reality. Do you remember the ravings about "death panels" when the Affordable Care Act passed? Of course there's nothing in the ACA that could conceivably be construed that way, but the scary meme was imported from arguments about single payer or, as in the UK, socialized medicine schemes.

To put this in the simplest and starkest terms, let's consider Britain, that totalitarian dungeon. In the UK, the government owns and operates an entire health care system that serves the entire population, called the National Health Service. Physicians, nurses, technicians, hospital staff, everybody who works in the system, are government employees. If you want to, you are free to pay for services from private providers, but obviously you have to be able to afford it.

This means that every year, Parliament has to put up the money to fund the NHS, and that sum is necessarily finite. Under Tory rule, it's been less than enough for the NHS to provide generally satisfactory services, but even under a more liberal government it would obviously have to be a specific number. Necessarily, therefore, there is a body called the National Institute for Health and Care Excellence (abbreviated NICE because of its former name) which among other functions decides what treatments the NHS will cover based in part on their price.

The way it works is that they estimate the benefits of a given treatment using a metric called Quality Adjusted Life Years (QALYs), which takes into account both the additional years of life that will be gained across the whole population if the treatment is authorized, and the associated quality of life. How they do the quality adjustment is controversial and can legitimately be questioned, but it is necessary. Some treatments don't extend life at all, they just make life better. They still need to be scored. Others might extend life but only in a vegetative state, or in terrible suffering such that most people would prefer death. So you need some common metric. We won't worry about the specifics of that just yet.

Then, yes, they put a price on it. As a first order decision rule, the price is 20-30,000 pounds per QALY, which comes to about $40,000. Note that contrary to a common misrepresentation, this does not take into account the present health or quality of life state of any given individual. Approval applies to the treatment, not to individual recipients. Also, they do make exceptions to the general rule and approve some treatments that cost more under some circumstances. But they are not a "death panel" that decides that Sarah Palin's child with Down Syndrome doesn't deserve health care. 

Weirdly, some Republican politicians tried to claim that under a system of rationing such as would be required by a universal health care system, Stephen Hawking would have been allowed to die. Hawking of course received free health care from the NHS for his entire life. The stupidity of conservatives is breathtaking.

Anyway, nevertheless, many Americans find this offensive. However, what we do is far worse. We deny people who can't afford it any health care whatsoever, at least in those Republican led states that refused the Medicaid expansion. And absent the ACA, private insurers denied insurance to people who actually needed it. That was apparently perfectly okay. Note that in the UK, NICE doesn't take anything away from anybody. If you can pay out of pocket, go for it, just as in the U.S. They just try to allocate the finite budget of the NHS in the most equitable and effective manner.

So consider a cancer treatment that costs $250,000, that extends life a median of a few months, and they definitely do exist. Does it really make sense to give that to every possible candidate, while providing no health care at all to low income young adults? While letting uninsured or underinsured people die of readily preventable causes? How is that a moral imperative?

In fact every one of us puts a price on our own lives every day, every time we ride in a motor vehicle or cross the street. There has to be a price on human life because our resources are finite. The only question is how we set it, and why we set it differently for different people. The problem is indeed very complicated and I have not even tried to fully analyze it. I'm just making it clear that it exists and pretending it doesn't is not a rational argument.

2 comments:

Woody Peckerwood said...

This is all very rational and well thought-out until it comes to your own ass.

When it's YOU, it's going to be different. You're going to want that treatment that the board says is not worth the expense. And that's what scaring people about single-payer government run healthcare.

I'm not telling you anything that you don't already know.

Cervantes said...

Jesus Christ on a stick, talk about missing the point. Private insurance would be unaffordable if they didn't place any limits on coverage. Private insurance plans have all sorts of restrictions, including lifetime and annual caps, cost sharing and deductibles, restricted formularies, and so-called "medical necessity" requirements. They won't pay for hugely expensive treatments of little effectiveness either. People with private insurance are dying right now because they can't afford insulin. The problem of scarcity exists and is just as ineluctable no matter who is paying. Actually the government programs -- Medicare and Medicaid -- are if anything more generous.

And as I say, if you can afford it, and you want to pay for yourself, there's nothing stopping you. It isn't taking anything away from anybody, it's just allocating the limited resources of government fairly.