Not sure I agree with this. It seems to me the biggest problem with cost of the healthcare is the billing system, and not the total amount of resources consumed. I think a more efficient way is to compensate the providers (including, eventually, drug and device companies) in a systematic way for their fixed costs, and then to bill medical services closer to the marginal cost.

Instead we force providers to recoup their fixed costs by haphazardly billing whatever they can when a patient is unfortunate enough to have no choice but to use their services. It works, more or less, in other high-fixed cost, low marginal cost markets, but it doesn't really work in health care.

Great post.

I'd argue with the overemphasis on industry and lobbying. Politicians are scared of even mentioning the possibilities of cost control, not because of fear of lobbyist and campaign contributions (they scapegoat all of the key stakeholders except doctors already), but out of fear of voters. Voters who overconsume in all facets of life, have borrowed at extremely high levels to spend above their means. Its no surprise that in issues of life and death, medicine, they want everything and then some, with a focus on quantity, not quality.

The question is how you address it. Through a government backed-system, which can afford another $10-20 trillion in debt before we're in a horrible enough financial shape that we're forced to address these issues? I think not. Cost control is very hard. Because of the limits that need to be made, and the importance and complexity of the issue involved. We must reform our system in a way that people have a greater stake in the health of the system. That isn't one where government pays all of the bills. We must have a smart, tightly regulated system that pushes people to think about value themselves, with government playing a key role in helping them determine what that is. But government, at least for the next $20 trillion of waste, isn't in the position to make the tradeoffs itself. We need to want to control costs.

Good post, though there are some pretty big overgeneralizations and loose talk here in the pursuit of rhetorical points.

For example:
"We are too terrified of waiting for a procedure to even think of not providing it. We ask only that the procedure be proven effective against a placebo. "

The "we" in these two sentences is not the same. The first "we" is the majority of Americans, though I would suggest you focus more on the feeling of entitlement than terror.

The second "we" really can't be thought of as the majority of Americans, because most don't even know what standard must be met for a new drug or treatment, and I suspect you would get quite a lot of support in the abstract for a rule which stated that the cost of a drug must be weighed against the size of the impact and/or against the value proposition of other similar drugs. What I'm getting at is that the current standard is overwhelmingly driven by those with a direct monetary stake in having a lower bar to cross in order to bring a drug/treatment to market.

Another point: As a former philosophy instructor, I don't think you really mean the following as an encapsulation of the American attitude:
"Better to let five people die passively than kill one consciously."

The killing/letting die distinction doesn't map neatly onto the jumbled rationing by default that occurs in our current system and the planned rationing that occurs in a system designed to maximize the public interest. Letting people die because they don't have insurance and get denied treatment isn't any more "passive" than letting them die because they are 70 and are low priority for a liver transplant.

No one is proposing reaching out and killing anyone. It is all about "letting die." It's just in one case we are honest about the effects of our policies, and in the other (our current non-system) most Americans are in denial.

Nonsense:

"We’re profoundly uncomfortable saying that a person’s life, or health, is not worth the price of a particular procedure. And so we don't."

Are you truly suggesting that HMOs do not routinely deny coverage medically necessary procedures that cut too deeply into their bottom lines?

Seriously?

Have you never heard of someone being cut from their insurance after incurring a too expensive illness, and then not being able to get new insurance because of this now pre-existing condition?

Really?

Ezra, the use of detailed cost/benefit analysis is an integral part of any for-profit Health care business model, and far too often in this model places the illegitimate need for outsized profits over the legitimate needs of the individual patient.

To suggest otherwise is either profoundly dishonest or pathetically naive.

I think it's possible that you're missing an important point here, namely that the overconsumption of procedures goes hand in hand with the denial of care.

When it costs you a huge chunk of your income and/or your self-respect to get access to care in the first place, and you have no idea whether you'll have similar coverage next week, must less next year, it makes a twisted kind of sense to consume all the healthcare you can right now. The fact that an institution you generally despise (your insurance company) is footing the bill just makes it that much more psychologically satisfying.

You see the same kind of principle going on with overconsumption of goods in the face of income volatility, or overconsumption of food by people who have lived with serious hunger.

A good universal-care plan would remove a great deal of anxiety from the process of getting care. People who live in other countries seem uniformly to report that they just go to their doctors, show their card, and get care at moderate prices, without worrying about hidden gotchas or that their insurance company will randomly decide to stop paying or terminate their coverage. Makes being sick that much easier.

Ezra's right - we place too much value on life and health in this country, and that attitude has allowed drug companies and doctors to grow fabulously - and unfairly - rich. No one's life is worth $20 million, except maybe that of our politicians, academics, A-list celebrities, and journalists, who are the only ones who are actually important in our society. But people, being irrational, will continue wanting to obtain healthcare benefits that they don't deserve, and the system is set up to allow them to do so without internalizing the actual costs (if they knew that the treatments would cost $20 million, and had to pay out of pocket, surely they would realize how little cost-benefit there is to the decision), and denial-of-care decisions by private insurance companies are subject to lawsuits, so the companies go ahead and provide it. The only solution seems to be to take that choice away from the consumer and rationalize the healthcare system under government oversight, so that only the most cost-effective means of healthcare are delivered, and to proscribe or regulate out of existence any private medical care (to ensure that the government monopoly can survive). This will not only allow us to control costs at long last, it will also ensure that only the most important among us - especially the politicians, celebrities, and journalists - can obtain expensive, modern medical care. Everyone else - the little people who have little merit and wreck environmental destruction by breathing, breeding, and using modern conveniences - will just have to learn to do without. We can learn a lot from traditional societies like Zimbabwe and North Korea, where the healthcare system has controlled costs successfully. Once we finally control costs, we can restore fairness to our society and economic system and work to help the environment as well.

How about health care credits? Well could print them up on green paper and you could do work for people to get them. You and your doctor could decide want health care you want and how many credits he's going to charge you. Pretty crazy, huh? I did a computer model and it works. We should try it.

We’re profoundly uncomfortable saying that a person’s life, or health, is not worth the price of a particular procedure. And so we don't. We are too terrified of waiting for a procedure to even think of not providing it.

Only a 24 year old kid who doesn't have to worry about his health right now can think like that. Wait 20 or 30 years and see if you feel the same way.

Jim is right. People need to realize that their lives are actually worth very little. The government will be very helpful when it comes time to do the difficult but honorable work of figuring out the dollar value of individual lives. For example, should a recently laid off auto worker over the age of fifty get and health care at all? I mean, what could his life possibly be worth? No possibility of re-employment, probably in poor shape, and likely politically unsophisticated. This is going to be easy.

I would hardly call an overriding concern for human life "pathological".

What you are essentially demanding is that people die so they can save money. This is somewhat backwards. Money is no use to a dead man, neither is a car or a house. It is a no brainer why people would sacrafice these things for more life.

Personal anecdotes allowed here?

My spouse has had 4 aortic ruptures. Few people survive ONE--about 80% who are diagnosed with one die, usually enroute to an emergency room in an ambulance.

The first two aotic ruptures were were repaired locally--we had reason to anticipate one might come, and had dozens of expensive MRIs and CTScans until signs of a developing rupture were found and she was slapped into the operating room pronto to fix them before she died.

When the third was looming,based on more MRIs and CTScans, local doctors said this one was beyond their powers to repair, and recommended a specialist who does nothing but aortic grafts, Dr. Cosselli in Houston. We flew down (carefully) and the operation was a success.

Exactly one year ago, unexpectedly, a fourth occurence. She was one of the 1-in-5 who survive the ambulance ride to ER with this condition. Conferred with local doctors in the ICU (expensive place to be lying around, conferring!) They said, "We've never done this, but we have an idea how to do it!" I blackberried Houston, asked them to call and confer with local doctors, and the decision was made to transport my spouse to Houston, despite the serious possibility of death en route.

The local hospital insurance manager required me to sign a promissory note for the flight: $50,000. He guessed our insurance might pay half if we were very lucky, but would probably stick us with the whole bill.

An ambulance plane came, flew us to Houston, rolled directly into the operating room, and after 17 hours of surgery at Dr. Cosselli's OR, success!

Now, two questions:

1. The value of a human life? My spouse is age 53, been on disability for blindness for 13 years, and has a pretty lame aorta. Under the Ezra plan, does she get the plane ride or not? I made my judgment, clouded though it might be by affection. Are you prepared to make a different judgment call--for example, let the local doctor "try something they think will work?"

2. Dr. Cosselli in Houston was motivated to invent a clever aortic graft and perfect the operation in order to make a lot of money. Does your plan maintain Dr. Cosselli's financial motivation--because if he had not had that motivation, I am pretty sure my spouse would be dead.

The key issue here is whether people have the choice to get access to procedures which have a small likelihood of success (in the eyes of the health care industry). The two extremes are nationalized health care which would prohibit anyone from getting procedures they deem to have too low a likelihood of success. The other extreme is a third party payer system similar to the one we have except everyone gets it and there is no rationing.

Shouldn't we have something that takes the best of both. If everyone gets universal health care then the health care industry must use its judgment to ration services as their professional judgment dictates but if we are willing to pay for the procedure ourselves then we should have it. Of course that means the wealthy get it and the middle-class and less well off do not. If you really are willing to put your fate in the hands of the all knowing government then you should feel the wealthy are just wasting their money yet occasionally they may discover some untried procedure that works. They, therefore, are unintentionally underwriting medical advances. If the non-wealthy still wish to get heroic procedures then let them raise the funds through public outreach - those who can make a case due to their prior deeds, personal charm, or popularity then good for them, they deserve it - for all others go to the end of the line and take your chances. We need to pick our poison and assume the consequences.

"We’re profoundly uncomfortable saying that a person’s life ... is not worth the price ..."

Leave it to the government to determine which lives are "worthy to be lived," and you lay the underpinnings for the Nurnburg Laws.

So yes, by all means, let's assume the consequences.

"...my read of the evidence is that at the root of our health care problem is an almost pathological aversion to making hard choices -- an aversion that has, in its steadiness and implications, become the most consequential choice of all."

Your diagnosis is fine, but what of your prescription? WHO should make the hard choices?

As long as a third-party is picking up the tab for healthcare (unlike other spheres in our economic system), the choice (to ration) will be made by a government bureaucrat. It's worth taking seriously the opportunity to drive down costs that would come from encouraging individuals to pick up the tab for their own healthcare (while buying affordable high deductible insurance). Government can then concentrate on covering the poor -- and ensuring those with pre-existing conditions don't fall through the cracks and end up personally bankrupt.

It's hard to imagine how an approach in which government decision-makers make all the "hard choice" leads to anything that encourages medical progress -- even if it does in fact control costs. Have government schools -- which cut families out of the decision-making loop -- enabled innovation and progress in K-12 education? Exactly.

The government will be very helpful when it comes time to do the difficult but honorable work of figuring out the dollar value of individual lives.

I like this idea. Think of how many congressmen and senators would be dead by now. I don't see any chance of a republican leaning buerocrat denying care to a democratic leaning person...or vice versa. The government would never allow politics to worm its way into healthcare decisions.

How about just turning anything and everything that has to do with healthcare into a non-profit, with annual excesses in funding being placed into a trust that covers the poor? Add an X-prize type reward for medical advances in treatments, drugs and devices and you'd maintain the incentive structure. Base all medicine on evidence-based outcomes and you could easily determine the good doctors from the bad and weed them all out.

The government could fund a national EMR to track everything and make sure all providers had the best software for documenting care and billing for the volume they have and the difficulty of a specialization.

Just remember, if we truly nationalize healthcare, then your doctor becomes a government employee - with all the excellence in customer service that comes along with the DMV.

Eraz is right--

Our very American fear of death has much to do with aversion to any form of rationing.

We want everything possible done--even if that means tormenting the patient with another round of chemo in order to give her an extra two months of poor quality life.

Dr. Steve Schroeder (former head of Commonwealth Fund)
quotes a resident in the U.K. saying to him "You Americans just don'tknow when to stop."

The odd thing is that we claim to be the most religous country in teh Western World. (A higher percentage of Americans say they are religious).
You would think we would be more eager to meet our maker.

But it isn't just our fear of death.

The profit motive explains why Aemricans undergo more tests and procedures than anyone else in the developed world.

We are the only advanced nation that has chosen to turn health care into a largely unregulated for-profit enterprise.

Like all for-profit industries the health care indusatry wants to grow: more sales, more revenues, more profits.

But as a society, we don't want our national health care bill to grow--we can't afford it.

Nevertheless, the indutry, its shareholders, its lobbyists and the conservatives whose first priority is accumulating wealth all support the notion that More healthcare, and More expensive care is better care.

Medical reserach shows that just isn't true.

The McKisey reserach quoted in Part 1 of this post is mistaken.

We have a great deal of reserach done by other groups showing that U.S healthcare is more expensive not just becaue we pay more for everyting (except nurses) but because we use
more advanced medical technologies (which includes not just equipment but drugs and new tests and surgical procedures) than any other nation.

And we overuse it on a great many patients who do not benefit.

McKinsey has its own conservative bias in favor of businesses growing, but the fact is that overtreatment is the major problem for insured Americans.

1/3 of our healthcare dollars are wasted on overtreatment.

See my comment on part 1 of this post for research that
contradicts McKinsey.

(I posted it yesterday but apparently forgot to hit post, but I had a copy so I posted it again today.)

Eraz is right--

Our very American fear of death has much to do with aversion to any form of rationing.

We want everything possible done--even if that means tormenting the patient with another round of chemo in order to give her an extra two months of poor quality life.

Dr. Steve Schroeder (former head of Commonwealth Fund)
quotes a resident in the U.K. saying to him "You Americans just don'tknow when to stop."

The odd thing is that we claim to be the most religous country in teh Western World. (A higher percentage of Americans say they are religious).
You would think we would be more eager to meet our maker.

But it isn't just our fear of death.

The profit motive explains why Aemricans undergo more tests and procedures than anyone else in the developed world.

We are the only advanced nation that has chosen to turn health care into a largely unregulated for-profit enterprise.

Like all for-profit industries the health care indusatry wants to grow: more sales, more revenues, more profits.

But as a society, we don't want our national health care bill to grow--we can't afford it.

Nevertheless, the indutry, its shareholders, its lobbyists and the conservatives whose first priority is accumulating wealth all support the notion that More healthcare, and More expensive care is better care.

Medical reserach shows that just isn't true.

The McKisey reserach quoted in Part 1 of this post is mistaken.

We have a great deal of reserach done by other groups showing that U.S healthcare is more expensive not just becaue we pay more for everyting (except nurses) but because we use
more advanced medical technologies (which includes not just equipment but drugs and new tests and surgical procedures) than any other nation.

And we overuse it on a great many patients who do not benefit.

McKinsey has its own conservative bias in favor of businesses growing, but the fact is that overtreatment is the major problem for insured Americans.

1/3 of our healthcare dollars are wasted on overtreatment.

See my comment on part 1 of this post for research that
contradicts McKinsey.

(I posted it yesterday but apparently forgot to hit post, but I had a copy so I posted it again today.)

Eraz is right--

Our very American fear of death has much to do with aversion to any form of rationing.

We want everything possible done--even if that means tormenting the patient with another round of chemo in order to give her an extra two months of poor quality life.

Dr. Steve Schroeder (former head of Commonwealth Fund)
quotes a resident in the U.K. saying to him "You Americans just don'tknow when to stop."

The odd thing is that we claim to be the most religous country in teh Western World. (A higher percentage of Americans say they are religious).
You would think we would be more eager to meet our maker.

But it isn't just our fear of death.

The profit motive explains why Aemricans undergo more tests and procedures than anyone else in the developed world.

We are the only advanced nation that has chosen to turn health care into a largely unregulated for-profit enterprise.

Like all for-profit industries the health care indusatry wants to grow: more sales, more revenues, more profits.

But as a society, we don't want our national health care bill to grow--we can't afford it.

Nevertheless, the indutry, its shareholders, its lobbyists and the conservatives whose first priority is accumulating wealth all support the notion that More healthcare, and More expensive care is better care.

Medical reserach shows that just isn't true.

The McKisey reserach quoted in Part 1 of this post is mistaken.

We have a great deal of reserach done by other groups showing that U.S healthcare is more expensive not just becaue we pay more for everyting (except nurses) but because we use
more advanced medical technologies (which includes not just equipment but drugs and new tests and surgical procedures) than any other nation.

And we overuse it on a great many patients who do not benefit.

McKinsey has its own conservative bias in favor of businesses growing, but the fact is that overtreatment is the major problem for insured Americans.

1/3 of our healthcare dollars are wasted on overtreatment.

See my comment on part 1 of this post for research that
contradicts McKinsey.

(I posted it yesterday but apparently forgot to hit post, but I had a copy so I posted it again today.)

@Repetitive Anonymous Poster:

Rather than spout out generalities, grapple with the specific anecdote I am offering: My spouse survived her first two aortic ruptures because her doctor prescribed dozens of CTScans and MRI's, each of which came up negative, until finally a CTSCan uncovered the development of an aneurysm on its way to rupture. Were all those CTScans and MRIs (except the one, in each case, that saved her life before each of her first two aortic ruptures) an example of what AnonymousAnonymousAnonymous decries when writing, "Aemricans [sic] undergo more tests and procedures than anyone else in the developed world.

The technology to save those with complicated aortic ruptures simply did not exist until the Cosselli graft was invented by Dr. Cosselli. I am quite sure that until Cosselli had saved many thousands of lives, the consensus in his medical specialty was that his was an example of how "we use
more advanced medical technologies (which includes not just equipment but drugs and new tests and surgical procedures) than any other nation. And we overuse it on a great many patients who do not benefit."

I have no doubt whatsoever that the good Dr. Cosselli fits the bill of particulars Anonymous cites: "We are the only advanced nation that has chosen to turn health care into a largely unregulated for-profit enterprise. Like all for-profit industries the health care indusatry wants to grow: more sales, more revenues, more profits."

Good for my spouse that Dr. Cosselli saw the profit potential in developing a surgical procedure for something that until recently was a death sentence.

In the interests of brevity, I left out on piece of information in my original anecdote: Between aortic ruptures #3 and #4, my spouse engages in a successful 8-month stint of procedures to arrest a cancer--it was the whole nine yards, including radiation, chemo, even radiation seed implants.

Does Dr. Cosselli have the right to benefit financially from his medical invention? Does my wife have the right to use up valuable medical resources to get an ambulance plane flight to Houston to save her life. When someone has already had three aortic ruptures, should that person be disqualified from aggressive cancer treatment on the grounds that she is using up resources that should be reserved for someone more likely to live longer?

Does my spouse, who (without Cosselli's intervention) would no doubt have twice expired from aortic ruptures, have any business participating in an aggressive effort to combat cancer?

Dr. Cosselli in Houston was motivated to invent a clever aortic graft and perfect the operation in order to make a lot of money. Does your plan maintain Dr. Cosselli's financial motivation--because if he had not had that motivation, I am pretty sure my spouse would be dead."

Bullshit. Dr. Cosselli was motivated by many things (personal fulfillment, prestige, etc) of which money was only one. See, for example, the many many treatments that have been developed in other countries without the same financial incentives.

And you have already chosen, insofar as you side with this system, that tens of millions of people will die of much more pedestrian illnesses so that you can have this access. But because it's a passive choice, you don't mind. Which is Ezra's point.

Good for you and your wife that you're on the winning side of this equation, and can even think about $50K promissory notes and tens of thousands in out-of-pocket expenses. I'm not being sarcastic. But your anecdote is as good as one could come up with to prove Ezra's point.

But nolaboyd, she's a blind, 53-year-old woman on disability retirement who's had several aortic ruptures. What RIGHT does she have to aggressive cancer treatment? Isn't she killing tens of millions of people by clinging to her worthless life? Shouldn't government require her to succumb to cancer death? After all, fair is fair.

We’re profoundly uncomfortable saying that a person’s life, or health, is not worth the price of a particular procedure. And so we don't. We are too terrified of waiting for a procedure to even think of not providing it.

Once the gov't is the only address to go to for health care, then the gov't handbook is the only arbiter of when your life is no longer worth living. No chance to find a sympathetic practitioner or rely on family or on charitable help.

An upside for Ezra and his friends is that they can use this scheme to off people who they don't like.... After all, the life of a hillbilly isn't worth much to begin with, so at age 65 you might as well let him go so that some "self-actualizers" can get a bit more of a chance.

trulee, don't you get it? Individuals like this woman simply have to be sacrificed for the common good.

This system has been tried in the past and was found to be inhuman.

But that was because the wrong people were in charge. This time around it will be 20 and 30 year olds who graduated from elite universities and would never dream of doing something "productive" like joining the corporate world or becoming a General Practitioner.

Obviously they are suited to solving MBS crises, making GM competitive, fairly allocating medical resources, avoiding their taxes etc.

The odd thing is that we claim to be the most religous country in teh Western World. (A higher percentage of Americans say they are religious).
You would think we would be more eager to meet our maker.

Actually religious people still believe that human life has "sanctity" and that preserving it is a religious imperative.

The progressive view seems to be not that far off from Logan's Run - just the age is different.

So.. just what exactly makes a life worthy of saving, in Hitler, opps, Excrement Klein's opinion? Tell me, Ezra, given the fact that the survival rate of AIDS patients is not high, do you believe we should stop all AIDS treatments as it's a waste of money?

"We’re profoundly uncomfortable saying that a person’s life, or health, is not worth the price of a particular procedure."

We ought to be uncomfortable, Esra, because Western civilization is built on the idea that God gives and takes our lives, not men. I can see you are nominating yourself for the position of God, but the first commandment tells me to resist your self-nomination. There is only one God, Mr. Klein, and neither you nor I nor any policy wonks is Him. You don't get to decide the value of a human life: that's a God job. Get back to being a human being. Your self-aggrandizement embarrasses us, if it doesn't embarrass you.

Something, oddly enough, that Democratic lawmakers never seen to want to discuss: first you'll have to kill all the lawyers. If you're going to have government (and that's what it will come to) deciding when/if a "person's life, or health, is not worth the price of a particular procedure," I mean. Just ask Tennessee.

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