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Monday, July 20, 2009

Why We Must Ration Health Care

In a New York Times piece, a bioethics professor defends rationing in health care, stating we have to do it.  He uses a number of examples in which the cost of prolonging a persons life a few years, or months is just too high.

He is largely correct.  I made the same point at a health care forum last week.  It would be impossible to provide everyone all the possible medical care, treatments, and tests available - the cost would far exceed our entire GDP. 

But the question on which I disagree with the article is "Who should ration care?".  In all cases, it would be the party that controls the money.  Should be it the government?  Do you want Congress, President Obama, or a new bureaucracy in Washington DC telling you when you can't get health care?  (Note that in Canada, it is illegal to pay cash for health care, though the law is largely ignored, because so many violate it.)  Or should consumers be the ones making that choice?

There are alternatives to government takeover of health care, that put consumers and patients in charge.   Consumer-driven health plans allow individuals to make their own decisions about "rationing."

I have a couple of other quibbles with the author.  He writes, "In the U.S., some 45 million do not [have insurance], and nor are they entitled to any health care at all, unless they can get themselves to an emergency room."  This is obviously untrue, in fact, at that same health care forum, Kathryn Serkes of the Association of American Physicians and Surgeons talked about how many doctors are refusing to take insurance because of the cost of compliance, and instead dealing in cash only (at a much lower cost).

Secondly, he makes the old claim that "estimates of the number of U.S. deaths caused annually by the absence of universal health insurance go as high as 20,000."  Indeed, there is little doubt that those without insurance are in worse straits those with coverage (though to claim deaths were caused by lack of insurance is poor logic).  But those on government insurance have even worse health outcomes than the uninsured.

This only further makes the point that rather than putting more people on government insurance, we should adopt reforms that allow more individuals and families to afford private insurance. 


Anonymous said...

NB. Would you also advocate the repeal of existing government run health care systems: Medicare, Medicaid, SSI, and VA? What about the tax incentives for private health care coverage? These are the existing big dollar costs well in excess of the Obama plan. In fact, I am curious how much these existing government health programs are expected to cost over the next ten years ... surely more than the trillion and a half for Obama-care.

Nathan Benefield said...

Yes, these are huge ticket items; Medicare especially. I believe Heritage and the Peter G. Peterson Foundation have has some good charts and data on how much that is expected to cost in the coming years (and it isn't pretty).

As for Medicaid, our proposal is to turn that into credits(means tested subsidies which phase out with income) for recipients to buy private insurance, put into an HSA, etc. This would help reduce the costs (which have been rising at an unsustainable level), give recipients better health care, and make individuals less reliant on government with a plan they can keep if and when they get a job.

I haven't looked as much in Medicare, VA, et. al., being a state-based group, but many of the same ideas would apply.

Anonymous said...

Two points to remember about Pa: we have a huge elderly population and a huge veterans population when compared to other states.

Elderly are the main driver of costs from Medicaid and it is for nursing and end of life care. If we adopt your approach on Medicaid, I doubt there would be an affordable policy for nursing home care. It is awful late in the game for an insurer to make a buck off a seventy year old's policy.

If we did away with VA care, then many of our WWII and Korea guys would be out in the cold and particularly those who sacrificed the most for our country. The Vietnam era vets are not far from retirement age either. Again, these age cohorts do not lend themselves to a savvy insurer looking to make a buck.

I have a sneaking suspicion that our fellow Pennsylvanians would not want our veterans to end their years on the streets. The end of a national health program for our veterans would, in my humble opinion, be met with more costs on the state and make us even more uncompetitive.

Nathan Benefield said...


Please read our report on Medicaid reform - in which we propose income and risk adjusted subsidies for insurance premiums for Medicaid recipients - before suggesting we want to through the elderly and veterans out into the street.

FYI, Veterans, Medicare, and Medicaid recipients get some of the worst health care, and many doctors refuse to take new Medicaid or Medicare patients. Why do you hate veterans, seniors, and the poor so much to force them into a terrible health care system?

Anonymous said...

NB. You are wise, mighty Oz. I am just a humble country bumpkin looking to get home to Kansas.

Yet, I go on.

Private insurers want to make a buck. If they can't make a buck, they won't offer the insurance.

You address that problem by having the government provide direct cash payments to individuals (welfare) so they can buy insurance.

And the people who set the level of direct cash payments to individuals under your system is the government.

It seems to me that the government is all over your solution.

Our dispute, therefore, is not ideological - which is a lazy man's intellectual game.

My point is that attention must be paid to how the existing programs run.

If, for instance, our Medicaid program has a 14% error rate - which translates into four hundred million dollars for PA and slightly more for the Feds - then we'd all be better off if the numbskulls in government did simething to reduce that error rate.