Richard Epstein on health care markets

H/T David Henderson.

Visualizing the explosion of medical data

Dying efficiently

elderly careAs noted in earlier posts here, here and here — as well as in connection with the final years of Dr. Michael DeBakey — one of the thorniest issues confronting effective reform of the U.S. health care and health care finance systems is the extraordinary allocation of health care resources to end-of-life care under the current systems.

My interest in this issue prompted me to note this insightful NY Times op-ed from over the weekend.

The author of the piece — Dudley Clendinen – is a former national correspondent and editorial writer for The Times. He is terminally ill with amyotrophic lateral sclerosis (ALS., more commonly known as Lou Gehrig’s disease) and is preparing to die in the most peaceful and efficient manner possible:

There is no meaningful treatment. No cure. There is one medication, Rilutek, which might make a few months’ difference. It retails for about $14,000 a year. That doesn’t seem worthwhile to me. If I let this run the whole course, with all the human, medical, technological and loving support I will start to need just months from now, it will leave me, in 5 or 8 or 12 or more years, a conscious but motionless, mute, withered, incontinent mummy of my former self. Maintained by feeding and waste tubes, breathing and suctioning machines.

No, thank you. I hate being a drag. I don’t think I’ll stick around for the back half of Lou.

I think it’s important to say that. We obsess in this country about how to eat and dress and drink, about finding a job and a mate. About having sex and children. About how to live. But we don’t talk about how to die. We act as if facing death weren’t one of life’s greatest, most absorbing thrills and challenges. Believe me, it is. This is not dull. But we have to be able to see doctors and machines, medical and insurance systems, family and friends and religions as informative — not governing — in order to be free.

And that’s the point. This is not about one particular disease or even about Death. It’s about Life, when you know there’s not much left. That is the weird blessing of Lou. There is no escape, and nothing much to do. It’s liberating. [.   .    .]

I’d rather die. I respect the wishes of people who want to live as long as they can. But I would like the same respect for those of us who decide — rationally — not to.   .   .   .

After World War II, the U.S. health care system was a leader in the medical world in embracing the optimistic view of therapeutic intervention in medicine, which was a fundamental change from the sense of therapeutic powerlessness that was widely taught to doctors by pre-WWII professors.

Isn’t it ironic that this remarkable health care system has not yet figured out a way to allow elderly patients to die in a peaceful, dignified and non-wasteful manner?

Who should pay for obesity surgery?

obesity-risk-factorsSo, the NY Times reports that a company that makes lap band devices used in bariatric lap band surgery has applied to the FDA to lower the obesity threshold at which surgery can be performed. If successful, the application would double the number of obese people who would qualify for bariatric lap band surgery.

Some of the obese people who would become eligible for the surgery have health complications that make it difficult for them to lose weight without the surgery. But most of the consumers covered by the new threshold could lose weight and not require the surgery by educating themselves and following healthy nutrition regimens. With third party insurers footing most of the cost of surgery at the point that obesity becomes life-threatening, why bother wasting time learning about — and adjusting a lifestyle to follow — proper nutrition?

Bariatric lap band surgery is expensive. Should consumers who make the effort to control their weight and follow healthy nutrition protocols contribute a part of their health insurance premiums to subsidize surgery for consumers who choose not to do so?

If consumers elect to take the risk of health problems from being obese, then shouldn’t they bear the cost of damages resulting from that risk? And shouldn’t insurers be free to elect not to cover consumers who engage in such risky behavior? Doesn’t shifting the cost of that risk to insurers (who pass it along to the all insureds) simply encourage the obese consumers to consume more health care and avoid confronting their unhealthy lifestyle?

As the late Milton Friedman was fond of saying, consumers will consume as much health care as they can so long as someone else is paying for it.

Paying for placebos

placeboOne of the most interesting issues in the health care finance debate is whether a consumer should be able to shift at least a portion of the cost of a placebo to a broad base of insureds. As The Economist notes, placebos are big business and – in some cases – just as effective as the real thing:

Alternative medicine is big business. Since it is largely unregulated, reliable statistics are hard to come by. The market in Britain alone, however, is believed to be worth around ¬£210m ($340m), with one in five adults thought to be consumers, and some treatments (particularly homeopathy) available from the National Health Service. Around the world, according to an estimate made in 2008, the industry’s value is about $60 billion.

Over the years Dr [Edzard] Ernst and his group have run clinical trials and published over 160 meta-analyses of other studies. (Meta-analysis is a statistical technique for extracting information from lots of small trials that are not, by themselves, statistically reliable.) His findings are stark.

According to his “Guide to Complementary and Alternative Medicine”, around 95% of the treatments he and his colleagues examined–in fields as diverse as acupuncture, herbal medicine, homeopathy and reflexology–are statistically indistinguishable from placebo treatments. In only 5% of cases was there either a clear benefit above and beyond a placebo (there is, for instance, evidence suggesting that St John’s Wort, a herbal remedy, can help with mild depression), or even just a hint that something interesting was happening to suggest that further research might be warranted.

Should a portion of your health insurance premiums be used to pay a portion of the cost of a placebo for your co-insured? Or is this an example of the situation in which the third party-payor system simply doesn’t control costs as well as a consumer-payor system?