Tuesday, October 20, 2009

The Problem With Health Care Solutions

Will Wilkinson responds to a philisophical argument for universal health care.

That argument, from philosopher Daniel Little:

It seems a bitter but unavoidable truth that there are very substantial inequalities in the provision of health care in our society. One person’s likelihood of surviving a devastating cancer may be significantly less than another person’s chances, simply based on the second person’s ability to pay for premium health care services. Further, it seems unavoidable that these extreme inequalities are flatly unjust in any society that believes in the equal worth of all human beings. And where this seems to lead is to the conclusion that some system of universal health insurance is a fundamental requirement of justice.

And Wilkinson's response:

Clearly Little is merely gesturing at an argument, but I cannot follow the gesture. That some are able to afford, say, a treatment with very expensive new technology that significantly increases (how much is that?) their chances to survive a devastating cancer compared to the chances of those who cannot afford it does not seem to me unjust, flatly or otherwise. It seems a trivial consequence of the fact that new technology is often much more expensive than older technology. Moreover, it seems plain that any economically feasible scheme of universal health insurance must refuse to cover many expensive treatments (new or otherwise). So a system of universal health insurance will do nothing to eliminate “extreme inequalities” in many kinds of cases. In these cases, the only hope of eliminating the inequality is forbidding access to treatments that cannot be provided to all under the universal health insurance system. But a policy of coercively preventing exchanges that help someone (the doctor, at least!) but harm no one is flatly unjust. Which leads to the conclusion that the attempt to prevent some inequalities in the provision health care is ruled out by the requirements of justice.

If Little limited himself to the much weaker, and much more plausible, claim that justice demands a system of institutions that offers health care that is as good as it gets for the least well-off, then justice might plausibly demand in health services what we have (and Little seems to endorse) in food: a competitive market with means-tested vouchers.

That just about everyone left of center, including philosophers, seem to glide from their moral premises, whatever those might be, to “some system of universal health insurance” will some day be appreciated as the peculiar ideological reflex that it is.

The discussion brought to mind this piece in yesterday's New York Times from conservative columnist Douthat. Douthat makes the argument for markets in routine care, but government coverage of catastrophic illness or injury.

But there’s another path, equally radical, that’s more in keeping with the traditional American approach to government, taxation and free enterprise. This approach would give up on the costly goal of insuring everyone for everything, forever. Instead, it would seek to insure Americans only against costs that exceed a certain percentage of their income, while expecting them to pay for everyday medical expenditures out of their own pockets.

Such a system would provide universal catastrophic health insurance, in other words, while creating a free market for non-catastrophic care. In the process, it would marry a central conservative insight — that we’ll never control spending so long as Americans are insulated from the true price of their medical care — to the admirable liberal premise that nobody should go bankrupt paying for life-saving treatment.

It's an interesting thought and one that I've entertained before, but that little hook at the end about avoiding medical bankruptcies is what gave me pause. Like most liberal initiatives, it just sounds so good, but is it really? First off, why are medical bankruptcies so much worse than bankruptcies caused by other tragedies not of one's own making? And more importantly, what does eliminating medical bankruptcies actually mean? To literally put an end to all medical bankruptcies would require either, 1- having the government foot the bill for all expensive medical care, an obviously impossible option, or 2- having the government decide which medical treatments are and are not cost effective and literally stand in the way of those who would bankrupt themselves on the more experimental and expensive treatments that the government deems as not cost effective. This goes back to Will's point that new technology costs money and the only way to really insure equality is to deny access to that technology.

This is the problem with attempting to bring notions of fairness and equality into the realm of cancer. Cancer is not fair and cancer is not equal. And for those with cancer stricken family members, money is usually not a consideration. Most folks are willing to go bankrupt for even the smallest, most unlikely chance that their family member could pull through and you can't transfer those costs to the rest of society without just crushing the economy. I don't deny the tragedy of medical bankruptcies, but remember, the institutions of bankruptcy exists so as to allow people to rid themselves of the debts they cannot afford to pay. And as tragic as it is, it would be worse in my book to forbid people to make these sorts of choices for themselves.

And maybe there's something to be said for the rich spending their money and the middle class going bankrupt on the newest, most experimental treatments. After all, this is how markets work, and the price of technology goes down as more and more people use it. Where will innovation come from if there's no one there to actually pay for it?


Anonymous rose said...

I like the last line. "Where will innovation come from if there's no one there to actually pay for it?"

The policy proposals that seek equality of care, by preventing the purchase of expensive technologies, seem to not even contemplate the long-run impact that will have on innovation.

Preventing the use of certain-technologies that aren't deemed to be cost-effective not only prevents a win/win transaction, restricts freedom and prevents that product from scaling up and declining in cost over time...but more importantly, it impacts tomorrow's R&D decisions. The drugs that exist today exist because someone was willing to risk some money on the hope that they'd make a positive return eventually.

There's innumerable innovations in every field that have occurred over the last 50 years that were at first prohibitively expensive and declined in cost over time, so that all classes of people benefitted. And I don't see how you can prevent rich people from purchasing expensive treatments with out negatively impacting innovation.

It seems as if either 1) supporters of these policies don't think about the long-run consequences, or 2) they understand the long-run consequences, but they're willing to sacrifice the well-being of future people in order to make the present more equal and just.

I think #2 is probably right.

2:38 PM  
Blogger lonely libertarian said...

I'd say a little from column A, a little from column B, and a little from column C, which is that supporters of these policies understand these consequences, but think that intelligent people in the government can solve any problem.

3:31 PM  

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