The Socialization of Medicine

by on April 18, 2014 at 12:10 pm in Current Affairs, Economics, Medicine | Permalink

“We understand that we doctors should be and are stewards of the larger society as well as of the patient in our examination room,” said Dr. Lowell E. Schnipper, the chairman of a task force on value in cancer care at the American Society of Clinical Oncology.

In practical terms, new guidelines being developed by the medical groups could result in doctors choosing one drug over another for cost reasons or even deciding that a particular treatment — at the end of life, for example — is too expensive.

More from the NYTimes.

Boonton April 18, 2014 at 12:19 pm

So incorporating prices in a decision is ‘socialism’? Just wondering….

Justin April 18, 2014 at 12:34 pm

Nice use of the passive voice! ;)

ThomasH April 18, 2014 at 4:02 pm

Boonton did not use the passive voice.

handle April 18, 2014 at 12:35 pm

It’s an agency problem. The patient wants the doctor to prescribe the best possible treatment without incorporating other considerations. If the price is too high for whomever must pay it, let that person explicitly deny the expenditure. The patient does not want to wonder whether the doctors judgment is being distorted by other than purely medical considerations, or that the uncertainty as to that question is being exploited as convenient political cover for those who would prefer to avoid being held responsible and accountable for cost-based care denial decisions, preferring instead if the patient is never told that there is a better, but more expensive treatment available, but that they won’t be getting.

mulp April 18, 2014 at 4:53 pm

Define “best”.

A treatment that costs $100,000 and requires living in a sterile room puking half the time with no contact with most people for six months to live two months longer than spending four months actively engaged with family and friends and out in the world for $10,000 for an aide who provides pain killers and stimulants as needed?

Some studies suggest that those who stop treatment and engage hospice live longer than those who seek all possible life extending measures.

Handle April 18, 2014 at 7:02 pm

@mulp: ‘Define “best”‘

I wish I could, but what stops me is this crazy notion that it can’t be defined, because value is subjective, and so people have to define it for themselves, and make their own decisions as well as they can, based on the doctor giving them complete advice about costs and consequences, instead of an abridged list options because of a perceived duty to the state that is opposed to his duty of loyalty to his patient.

When I walk into the mechanic because my car is acting up after a collision, he does a diagnostic, tells me all my options, prices, and consequences, and lets me decide what’s ‘best’ for me. He doesn’t hide the fact that I could use a costly new axle as a result of a collision because he thinks my car is old anyway and it’d be a waste of my insurance company’s money, and he has a responsibility to try and keep everyone’s auto premiums down. He’s my agent, not theirs, and whether the insurance company pays for his services or not is between me and the insurance company.

prior_approval April 19, 2014 at 12:19 am

‘and it’d be a waste of my insurance company’s money’

Considering that it is the insurance company that decides whether the mechanic is paid or not in serious cases, it is quite reasonable for the mechanic to stay within the boundaries of what will be realistically paid for.

In other words, what health insurance plan provides unlimited access to everytiing the patient can imagine?

andrew' April 18, 2014 at 7:11 pm

Good summay handle.

Dictors have their hands full. He he, thanks autocorrect, I’ll leave it.

They are already kill enough people without thinking they are good enough to worry about cost-effectiveness

Benny Lava April 18, 2014 at 2:13 pm

Well this is a tabarrok post so you get a lot of trollbait. Maybe people should stop commenting on Alex’s posts? I comment but he deletes them anyways.

prior_approval April 19, 2014 at 12:26 am

I’ve never noticed – any particular areas that get that response?

The holder of the Bartley J. Madden Chair in Economics at the Mercatus Center has recently become very fast.

Previously, it was Prof. Cowen and linking to online salary databases for public employees of the Commonwealth that was a source of prompt deletion.

Of course, there is also the linking filter for comment text – posting a link with a ‘rogue domain’ like the Pirate Bay or the New Yorker (thankfully fixed after being noticed) means the comment gets silently swallowed.

So Much For Subtlety April 18, 2014 at 5:17 pm

The problem is not the incorporation of prices. The problem is the idea that the doctor ought to consider someone else’s interests apart from the patient’s. This is appalling.

Stewards of the larger society? Is society objecting to paying for other people’s medical care? Not that I can see. What he means is that doctors ought to exercise the power of life and death over ordinary people. It is a sad little totalitarian itch. Because this is immediately recognizable to anyone who grew up on the farm – when the cow’s milk production drops a little, you consider the interests of the wider farm and put Bessy down.

Doctors are just out of control. It is not their job to act as stewards of a larger society. It is their job to treat their patients.

Boonton April 18, 2014 at 7:12 pm

So apply this to antibiotics. If a patient has a minor but unknown infection, antibiotics may be ‘the best’for him. Yet if that’s done for every patient you get drug resistant bacteria.

So Much For Subtlety April 18, 2014 at 7:57 pm

Yes. And? Entire unidentified diseases were wiped out in the 1950s because doctors routinely gave antibiotics. At least children don’t seem to be getting the same unidentifiable rheumatic fevers any more. How is that bad?

The problem is in the regulations that prevent new anti-biotics being invented. Not in their over-use.

Boonton April 19, 2014 at 7:14 am

1. It’s regulations that spur the invention of new anti-biotics. Specicially patent law which allows the company to reap monopoly profits for a time.

2. The cost of coming up with a new drug is huge, even with the most ideal regulatory policy possible it would still be huge. Bacteria just needs to mutate in the right way to make the antibiotic less useful or useless. In a universe of massive overuse of antibiotics it’s very unlikely that new antibiotics could be invented faster than bacteria could invent ways around them.

But my point was that doctors already consider factors beyond simply their patient’s interests. If a doctor is pulling back on antibiotics because he’s concerned about contributing to the rise of resistance he’s making ‘social’ considerations. If he writes a script because the patient demanding a pill of some sort is holding up the whole office, that too is a ‘social consideration’ beyond the strict domain of the individual patients interests.

So Much For Subtlety April 19, 2014 at 6:57 pm

You seem to have the odd liberal’s knee jerk approval of bureaucracy. Strange. Let us agree some regulations may help the production of new drugs. Some other regulations do not. New drugs have more or less come to an end because of government regulation.

The cost of a new drug is huge. Because of those regulations. It would not be huge with a different regulatory regime. As it wasn’t in the past. Penicillin cost roughly nothing to discover. We are not talking about massive over use. And there is, of course, no reason to think that new ones could not be discovered just as fast as bacteria could mutate.

All of which is irrelevant.

You are not dealing with my argument or what I said. Doctors should not be pulling back because of concern about bacterial resistance. He should not be writing a script because a patient makes a scene. That is something he ought to be struck off for in fact. So a pile of irrelevancies that does not address the issue.

Boonton April 19, 2014 at 8:35 pm

The cost of a new drug is huge. … As it wasn’t in the past. Penicillin cost roughly nothing to discover

Err low hanging fruit?

Dan Weber April 18, 2014 at 9:10 pm

So my plumber should recommend what’s best for me, even if it costs $80,000, and it’s only marginally less better than the $5000 solution?

Price is always part of the value proposition.

Mrs. Renard April 18, 2014 at 10:36 pm

Yes. He should, in addition to giving you the pros and cons of each solution. His job is to give you information. Then you can choose to spend 5K or 80K. The entire point is you should have choice.

So Much For Subtlety April 18, 2014 at 11:48 pm

You think for a minute he won’t? And he shouldn’t.

But this is not what is being suggested either. The doctor is not talking about his responsibility to your bank balance. He is not talking about what you can or cannot afford. He is talking about what “Society” (ie the government) wants.

The correct parallel is if the government tells all plumbers to make sure there is “social justice” in water use. So your plumber comes, looks at your home, sees your Romney 16 sticker, and decides you consume enough water and so does not tell you you can have a full strength shower head – oh and by the way he has to take out your old toilet and replace it with a water saving one.

That is not his job.

If the government wants to control costs, pass a law. Make a clear regulation. Without leaving the doctor much leeway ideally. Don’t lean on doctors to deny treatment based on a whim.

Boonton April 19, 2014 at 7:17 am

You are taking a fuzzy concept and putting forth one possible concrete implementation of it. Most ‘fuzzy concepts’ have possible implementations we wouldn’t like. That by itself isn’t a sufficient argument.

Boonton April 19, 2014 at 7:33 am

BTW, if you read the article it seems to be talking less about the gov’t telling doctors what to do as much as doctors themselves deciding these ’causes’. For example,

Doctors can face some stark trade-offs. Studies have shown, for example, that two drugs are about equally effective in treating an eye disease, macular degeneration. But one costs $50 a dose and the other close to $2,000. Medicare could save hundreds of millions of dollars a year if everyone used the cheaper drug, Avastin, instead of the costlier one, Lucentis.

But the Food and Drug Administration has not approved Avastin for use in the eye, and using it rather than the alternative, Lucentis, might carry an additional, albeit slight, safety risk. Should doctors consider Medicare’s budget in deciding what to use?

If this was the ‘government’ then the FDA could simply approve Lucentis for the eye condition. In fact, Medicare could even fund studies to get the data necessary to justify the additional approval if Lucentis’s maker doesn’t want to….on the grounds it would be cheaper for Medicare to spend $10M or so to get the data and then save $100M in scripts.

Here the doctors are thinking of writing Lucentis because of a vague concern about Medicare’s finances.

So Much For Subtlety April 19, 2014 at 7:04 pm

There is no implementation of this that is not bad.

I would prefer the government to tell doctors what to do. That would be clear, transparent and fair. That is not, I agree, what this doctor wants. He wants doctors to play God. To make life and death decisions on a whim. That cannot be good.

The FDA cannot approve a drug if the company does not want them to. It would be hard to fund a study without the company’s approval. But this is a non-issue. If both drugs are about as effective, then the doctor ought to choose the cheaper one – assuming he is allowed to. Doctors do. That has nothing to do with what the doctor wants other doctors to do. It is window dressing for a vile argument.

miko April 21, 2014 at 3:20 pm

“Is society objecting to paying for other people’s medical care?”

Actually, thats EXACTLY whats happening… and the society is having a hard time conveying their wishes effectively through market forces

Brandon April 21, 2014 at 3:48 pm

“The problem is not the incorporation of prices. The problem is the idea that the doctor ought to consider someone else’s interests apart from the patient’s. This is appalling.”

Short of 100% self-funding of medical care, isn’t this always the case?

Daniel Schwarcz April 18, 2014 at 12:34 pm

Agreed. In what sane system should anyone ever make a decision among alternatives without considering price?

Michael D. Abramoff April 18, 2014 at 1:48 pm

It is the ultimate paternalism.

In any normal system, the payer decides whether or not the price is appropriate. If I buy a bread, I can decide whether the price is appropriate and act to buy it or not.
But here neither the patient (not usually the payer) nor the actual payor (carrier or state) decides whether the price is appropriate.

What the ASCO is doing here goes against the Hippocratic Oath http://en.wikipedia.org/wiki/Hippocratic_Oath and also its modernization of that the Geneva Declaration http://en.wikipedia.org/wiki/Declaration_of_Geneva

“The health of my patient is my first consideration”

As a patient with cancer you will not know whether the drug your physician may not cure you, and was prescribed because it was the best for society, as another drug that would cure you would be too expensive for society. You will not know as patient whether if you paid more you would get a different, better, drug.

I am fine telling my patients that insurance or the government will not pay for a drug, which I consider the best, because it is not cost-effective or whatever reason it is not reimbursed, and so I will prescibe a less effective drug.
I am not fine prescribing my patients what I know is not the best drug for that individual patient without telling them this.

jz April 18, 2014 at 1:59 pm

patients babble that they want agency, but their actions reveal they really prefer paternalism.

David Wright April 18, 2014 at 2:18 pm

This is exactly the response I want to hear from my physician.

Steven Kopits April 18, 2014 at 2:37 pm

+1

Jan April 18, 2014 at 2:41 pm

The vast majority of doctors will not discuss price in routine prescribing. And
would you be surprised to learn that research shows physicians themselves often have very limited knowledge about the costs of different treatments?

To be clear, clinical guidelines are not binding for patients, providers or payers. These decisions all happen at the individual doctor level, which allows for total compliance with the Hippocratic oath.

andrew' April 18, 2014 at 7:13 pm

They are already swamped in paperwork.

Jan April 18, 2014 at 7:53 pm

It’s just more efficient for them to use that time to squeeze in more patients and make more money. There is a physician shortage, but increasing the supply by any significant amount would require the doc lobby to let that happen, which they are not very interested in doing.

steve April 18, 2014 at 10:13 pm

You should also tell the patient which drug or treatment nets you the most money.

Steve

ThomasH April 18, 2014 at 4:07 pm

I think we should cut Hippocrates some slack for not stating explicitly that the treatment should be cost effective..

mulp April 18, 2014 at 5:01 pm

“The health of my patient is my first consideration”

Is giving your patient chemo that causes significant suffering, breaks down the immune system, requires the patient be isolated, and offers little chance for remission and at best a few months longer life in isolation, a positive or negative for the health of your patient?

If you could extend the life of a patient by inducing a coma, cooling their body to 70 degrees to slow life and the progression of disease so the cancer finally kills your patient six months later than any alternative, would you argue that is the best treatment for the health of your patient? Six months more of life must certainly be worth it, right??

So Much For Subtlety April 18, 2014 at 6:04 pm

That is not the choice being offered. The choice being offered is what we traditionally know as medicine, or the British route – the Liverpool pathway. In which if a doctor decides that an elderly patient is too expensive to treat, he will place her in a drug-induced coma and leave her to die of hunger or thirst.

Exactly how that helps the health of the patient – from a numerical or quality of life perspective I do not know.

Jan April 19, 2014 at 8:21 am

That’s not at all the choice being offered. These guidelines are not being developed by a body like U.K.’s NICE. Private insurance and public payers alike have to determine whether to cover treatments now. And on both sides of the pond doctors are allowed to recommend whatever they wish to patients. What you’re complaining about seems to be what the insurers will pay for. And don’t you want doctors at least weighing in with guidelines rather than insurers just making these decisions from a purely $$ focuses point view?

Dan Weber April 18, 2014 at 9:12 pm

You seem to be hung up on chemo, but it can actually directly improve a patient’s quality of life in the short-term.

jz April 18, 2014 at 12:35 pm
Michael April 18, 2014 at 12:37 pm

“In practical terms, new guidelines being developed by the medical groups could result in doctors choosing one drug over another for cost reasons or even deciding that a particular treatment — at the end of life, for example — is too expensive.”

I don’t see what the big deal is–insurance companies already do this.

M. April 18, 2014 at 2:11 pm

Maybe doctors do not see themselves as businessmen.

Cliff April 18, 2014 at 2:45 pm

An insurance company is not a doctor.

Jan April 18, 2014 at 3:00 pm

And these guidelines are not a doctor.

Michael April 18, 2014 at 6:54 pm

Yeah, that was my point. Professor (smirk) Tabarrok posted this as “death panel” trollbait, but I think no one’s biting. It’s tough to be a Koch-funded blogger these days.

andrew' April 18, 2014 at 7:15 pm

What part of Krugman ecstatically admitting we “need” death panels did you not understand?

N April 18, 2014 at 12:39 pm

Unfortunately the capitalist approach lets insurance companies make these decisions instead of doctors.

Z April 18, 2014 at 12:46 pm

Capitalist: (n) Imaginary bogeyman that haunts the dreams of totalitarians.

Everything gets cheaper on a per unit basis except education and health care. Education and health care are run by the government. A coincidence, I’m sure.

Benny Lava April 18, 2014 at 1:53 pm

So oil got cheaper? Must be nice where you live.

JCW April 18, 2014 at 3:19 pm

+1

mulp April 18, 2014 at 5:05 pm

Its government’s fault, especially Obama’s, for failing to ensure Iraq, Iran, Libya, … are US territory with cheap oil leases granted to Exxon and BP and their free market capitalist oil production facilities defended by the US military.

triclops41 April 18, 2014 at 5:50 pm

Lol, Saudi Arabia, Russia, Venezuela, Iran, ask barons if free market oil production. Do you even know what OPEC is?
Your example only forget prices the point.
Fool…

triclops41 April 18, 2014 at 5:50 pm

*all bastions of free market*

Benny Lava April 18, 2014 at 7:10 pm

I know what OPEC is and it ain’t education or health care. Say how about cars are they getting cheaper? Or whiskey? Or are these health care and education too?

Chip April 18, 2014 at 7:37 pm

If you live near federal land there’s probably been no new extraction for years.

Thomas April 19, 2014 at 2:42 am

Number of hours worked to travel one mile got cheaper? Probably.

Floccina May 2, 2014 at 8:48 am

We do not so much buy oil but transportation miles at a level of comfort.

Chris April 18, 2014 at 2:02 pm

Despite your conclusory statement, the health care system is not run by the government.

Dave Anthony April 18, 2014 at 2:09 pm

Over 50% of the spending is by the government and regulations permeate every nook and cranny of our health care system, but no, it’s totally a free market system.

mulp April 18, 2014 at 5:12 pm

Government regulation controls every aspect of the economy:
the money
land ownership
property ownership
weights and measures
contracts
enforcing contracts
redistributing the wealth of lenders to the borrowers in bankruptcy
defense of property from local threats
defense of property from foreign threats

If government regulation of the economy is a bad thing, why aren’t you living in places like Afghanistan, Pakistan, Somalia, et al where government has no control over anything, especially the economy.

Justin April 18, 2014 at 3:49 pm

That’s more for Hansonian reasons (signaling and status competitions) than government regulations.

andrew' April 18, 2014 at 7:16 pm

Insurers have actuarial info that doctors may not.

Cliff April 18, 2014 at 2:46 pm

Why “unfortunately”?

Rahul April 18, 2014 at 12:40 pm

Doesn’t some beancounter at your Insurance Co. already make a similar choice in status quo? How is this new?

jz April 18, 2014 at 12:48 pm

What’s new? Physicians will have the heft of their peers to defend their decisions.
This is different than relying on the insurance company to place restrictions on wasteful desires of the patient.
The consensus will also apply to Medicaid and Medicare patients.

mulp April 18, 2014 at 5:28 pm

Medicare never paid for drugs for cancer treatment, and only paid 80% for surgery or other hospital care.

Only private insurance paid for them, but the standard supplemental plans provided little in the way of drug payments – the 15-20 different plans were defined before drugs became the most important factor in life extension. Antibiotics were a 15-30 day course and then done. Pain meds were 3-7 days then done.

I knew Medicare not single payer, but until I qualified I didn’t fully appreciate how much was out of pocket, unless you bought private insurance, if you got sick or injured. (I speak from reading the benefit terms which are provided in far more detail than any private insurer ever does willingly, not from needing care.)

Jan April 18, 2014 at 12:46 pm

It is truly awesome when the doctors themselves begin to do this of their own volition.

And credit to Alex for thumbing his nose at the paranoia peddlers on the right with the title of this post.

Cliff April 18, 2014 at 2:47 pm

It is awesome to violate your duty to your client and your profession’s ethical code?

Jan April 18, 2014 at 3:25 pm

Every doctor can choose what he or she prescribes to any individual patient. This particular group of doctors — who represent nobody but their own members — know full well that rationing happens in health care all the time, and often in the most inefficient ways. If Medicare does it, it’s pulling the plug on granny. If insurers do it, it’s all about driving profits and denying care. If doctors do it–in some cases against their own financial interests–it’s a trusted source helping patients and society face a tough reality.

Props to them for acknowledging this and taking a first step towards being better stewards of the limited resources that people and government have to pay for health care.

Rich Berger April 18, 2014 at 5:13 pm

You would have really enjoyed the Soviet Union – I hear it was awesome. When you collectivize health care, you get death panels, even though they hide their nature with abstract phrases like “.we doctors should be and are stewards of the larger society..”. There is no “larger society” that whispers in the doctor’s ear telling him when to override the patients desires and wishes. This is just a smokescreen for the doctor to substitute his ideology for the interests of the patient. If my doctor pulled this BS on me, I would find another doctor.

Jan April 18, 2014 at 5:59 pm

You are totally empowered to do that. You should proactively ask any oncologist you have the misfortune to have to visit whether he takes costs of treatment into account.

A large share of health care is already collectivized and it’s called Medicare. But it is one of the more idiotic ways to run a public health care program, because it has virtually no cost controls.

We are just starting to socialize this concept–pardon the pun–but it is absolutely necessary and will inevitably happen, because Medicare ain’t going away and there are limited dollars to pay for it.

andrew' April 18, 2014 at 7:17 pm

It is not necessary to do it the way you think.

Jan April 18, 2014 at 7:54 pm

Do tell.

steve April 18, 2014 at 10:22 pm

I always know the costs of the drugs I order and use. If there is no difference in an expected effect between two drugs, I use the cheaper one. Since I have been considering costs when making these decisions, does that mean I am a socialist? (I know it makes me unusual as most docs have no idea what treatments cost.)

Steve

Mrs. Renard April 18, 2014 at 10:52 pm

Patient should be informed and given the choice. Since Medicare has limited financial resources, Medicare can cover the less expensive option. If the patient chooses to go with the more expensive option, Medicare only covers up to the cost of the less expensive one. No one disputes unlimited wants/limited resources and the necessity of rationing. The dispute is in *who* should be doing the rationing. The most efficient solution results when the buyer takes this role by considering price and options.

Jan April 19, 2014 at 5:58 am

Ah, yes. This is reference pricing, described my comment below. It’s not a bad system, but there are limitations to circumstances where it can be applied.

Thomas April 19, 2014 at 2:47 am

Your repeated claim that this is simply a matter of a doctor “considering costs” is intentionally deceitful. There is a system where costs are explicitly considered at all times: the free market. Your ilk has moved our country further from the free market at every opportunity. Now you are claiming that considering costs is wise? It’s only “wise” because the considering isn’t being done by the individual but presumably by your ideological brothers and sisters.

Jan April 19, 2014 at 6:09 am

If you don’t understand how health care cannot operate as a free market good, especially since this country long ago made a very popular decision to create the social insurance program Medicare, then none of this will make sense to you.

Thanks for explaining my ilk to me, the ilk that expanded health are coverage on the foundation of a private insurance system. This is a member organization of physicians who will develop guidelines, not jackbooted bureaucrats who gleefully steal freedom from an otherwise perfectly functioning private market. Costs will continue to be considered by individual, and private insurers have done this forever. The only difference is that a physician group is weighing in — that is a positive development, since they kind of know this stuff.

Dick King April 18, 2014 at 12:50 pm

http://escholarship.org/uc/item/6j85h1dc kinda grows on you.

Under relative value insurance, people who want money-is-no-object care and who are willing to pay for it get to declare and pay for their wishes with their wallets when they sign up for insurance. Others who want to pay less and who want only the most cost-effective treatments [half the benefit at 1/10 the cost] can so choose.

Of course you need a trusted agent to rate the myriad treatments available.

-dk

jz April 18, 2014 at 12:56 pm

sometimes the cheapest care , or no care , turns out to be “best”
Ex.: ghetto kids get less C.Diff. colitis than suburban kids because they are prescribed less antibiotics.

Mrs. Renard April 18, 2014 at 10:54 pm

… which is why DK said: “Of course you need a trusted agent to rate the myriad treatments available.” This would keep the non-ghetto kids from getting antibiotics too often.

Robert McGregor April 18, 2014 at 12:53 pm

@Z, “Everything gets cheaper on a per unit basis except education and health care.” How about oil and water?

msgkings April 18, 2014 at 5:16 pm

And housing and food and almost everything except electronics.

More Z-flavored nonsense.

Chip April 18, 2014 at 7:43 pm

Housing is affected by two main things: availability of cheap loans and restrictions on building.

As for food, prices have shot up because the US and others are printing gobs of money. The Fed is the butterfly wing that caused the uprisings in the Arab world.

triclops41 April 18, 2014 at 5:55 pm

Oil and water are free markets? Are you really going to use those as examples?

Gabi Huiber April 18, 2014 at 12:53 pm

It’s new because Insurance Co. is not pretending to be a “steward of the larger society”. Insurers deny claims in order to stay in business. They know that if they deny too many they won’t have any customers, just as well as customers know that insurance that denies less is more expensive. It’s a balancing act between private parties, flawed though it may be.

Of course you want to take price into account in every choice you make, but it’s kind of strange when other people get to do it for you, and not because it’s on their tab, but rather because they see this as part of some grander stewardship mission than the drudgery of looking after the sick to the best of their ability, and billing for it.

Rahul April 18, 2014 at 1:10 pm

Yes, agree about mission creep. And it’s probably a gratuitous function no one explicitly asked them too. And a conflict of interest.

OTOH, say I was going to pay entirely out of pocket & asked my doc to decide for me the cost benefit tradeoff of two treatments, does ethics require that he decline to choose? Or not? If they get asked “Doctor, what would you choose if you were in my shoes”

Gabi April 18, 2014 at 2:22 pm

Well, it seems like a reasonable question to me. I would expect my doctor to help me choose. The potential for a conflict of interest remains if the doctor collects a share of the cost of the treatment, but potential is one thing, and actual fraud is another.

Rahul April 18, 2014 at 3:36 pm

Now, say your free market insurer sold you a policy with the caveat that for certain treatments they would ask your doctor to do a cost benefit analysis. Ethical or not ethical?

Where do we draw the line.

ThomasH April 18, 2014 at 4:10 pm

Is it ethical for a doctor NOT to do a cost benefit analysis?

txslr April 18, 2014 at 5:17 pm

Which raises a fundamental issue: How does a doctor perform a cost/benefit analysis of providing you with a medical service? He is equipped to make that assessment for himself, but not for you. How does he know the value of, say, diminishment of pain to you? Or the value to you of being relatively more ambulatory? Of course, he cannot possibly know the values or costs to “society” of these things either, so he is being asked to evaluate the trade-offs between things he has no capability of assessing. He is being asked to do the impossible.

As for insurance companies, they don’t do this either. They may say that they won’t pay x for a procedure because you can get it elsewhere for y, but they don’t say you can’t have this medically accepted and covered procedure because they’ve decided you’re not worth it or that the value to society is greater if you are cut off.

jz April 18, 2014 at 1:06 pm

one word: deductibles

The cost curve on health care has been dropping because deductibles have been slowly rising. ObamaCare policies have upped the deductibles acutely.
When people have large deductibles, they behave as though they have no insurance. I see a health care recession in the works.

Steven Kopits April 18, 2014 at 2:39 pm

+1

BenK April 18, 2014 at 1:11 pm

And we return to the basic problem – the MD’s job is to recommend options, the patient, to figure out how to pay for the care, given this expert advice. Whenever one group sets the price, another decides what to consume and a third pays the bill, the system will inevitably spiral out of control. In this case, a fourth set of people additionally set the cost of entering the system as a provider… so that providers have a ratchet built into their pricing.

RPLong April 18, 2014 at 1:29 pm

A lot of the previous comments seem to be missing the point. Putting the price decision in the hands of doctors means that patients may not even be aware of alternative therapy options if their doctor happens to be of the opinion that “it isn’t worth it.” Yes, insurance companies refuse to pay for some meds, but when they do that, at least you the patient know what the beancounters have decided against, and you can at least CONSIDER paying for it yourself or seeking charity.

Anything that takes therapeutic choices out of the hands of patients is a bad thing.

ThomasH April 18, 2014 at 4:11 pm

Who said the doctor should conceal his decision?

RPLong April 18, 2014 at 4:28 pm

If it’s not concealed, then what is the purpose of leaving it in the doctor’s hands? Currently, my doctors advise me about the list of available therapies, make a recommendation, and then leave the choice to me. If we aren’t talking about making changes to that, then what is the significance of this discussion?

andrew' April 18, 2014 at 7:22 pm

Should?

Or will?

ladderff April 18, 2014 at 1:32 pm

Quote given reads like something from Atlas Shrugged. These people are tone-deaf.

chuck martel April 18, 2014 at 1:33 pm

Medical care has never been cheap: http://nailheadtom.blogspot.com/2010/02/death.html

charlie April 18, 2014 at 1:35 pm

an entire post without talking about solvadi!

ThomasH April 18, 2014 at 4:01 pm

If “too expensive” means that it costs more than the benefit, I sure as heck hope they do. That’s what you expect from an honest lawyer (don’t laugh, I’m serious) or car repair shop.

andrew' April 18, 2014 at 7:29 pm

You assume they are talking about doctor owned services?

We can hope so.

Moreno Klaus April 18, 2014 at 4:38 pm

Im not sure whether most of the comentators get the big picture… there is a massive amount of overtreatment in cancer care. Prostate cancer is the primary example. This overtreatment is not only bad on the costs side but also for the patients themselves due to the side effects. Using cost effectiveness will allow to identify which groups of persons should be targeted for agressive treatment, and which should go to a sort of “surveillance”.

andrew' April 18, 2014 at 7:30 pm

This is mostly new knowledge arrived at by doing it a lot.

Jon April 18, 2014 at 6:06 pm

What really needs to happen is that government programs and insurance companies need to be able to set limits on the treatments they will pay for. Wealthy patients wanting to pay more, could chose to do so out of their own pockets. We should be able to (given currently what we shell out) pay for many rather expensive treatments.

Also where there are two treatment options with vastly different costs, but outcome differences that are too small to pass the test of value, the patient should pay the difference if he/she choses the pricier one. There will certianly be problems with this; but we have plenty of problems with the status quo.

Jan April 18, 2014 at 6:10 pm

What you propose sounds pretty similar to reference pricing, which in many cases can ensure good access to high quality care while lowering costs. It also gives freedom to those willing to pay more without harming patients with less resources.

http://www.nga.org/files/live/sites/NGA/files/pdf/2013/1306StateEmployeeAndRetireeHealthCareCowling.pdf

Noumenon72 April 18, 2014 at 6:29 pm

They don’t need to second-guess every single drug. They just need to consider the cost in these cases:
1) cost is > 1 year’s median income
2) no payer is lined up to pay for the cost
3) patient has < 1 year to live
It's the $200,000 bills for people who can't pay or are about to die anyway that are burdening everybody else, not $1000 here and there for Lucentis.

Tarrou April 18, 2014 at 11:05 pm

Dr. Tarrou prescribes you one .357 hollowpoint, to be taken orally. Do the right thing for “society at large”. I am the gatekeeper!

Mrs. Renard April 18, 2014 at 11:45 pm

If two patients need surgery and there is one operating room, what is the best way to decide who gets the operating room?
Options:
1) Neither
2) The doctor chooses
3) The patient who can pay more chooses

The egalitarian utopian would say #1: everyone is equal. The technocratic utopian would say #2, since the doctor knows who “needs” the operation more. The capitalist would say #3. The next day, under option #1 both patients have died; under option #2 and #3 one patient has died. But under option #3 the next day, you have 2 operating rooms, since the hospital made a lot of money and has a profit motive to build a second room (or an investor sees the hospital’s success and builds another hospital because, well profit motive). Which is why while the technocratic utopia may seem marginally better than the egalitarian one, the best outcome will be the outwardly seeming cruel capitalist choice.

Another consideration, in case #2: no matter what justification is given by the doctor to choose one life over another, the choice is nonetheless made by an individual. There is an ethical difference between an individual directly condemning one to die, and an individual, by choosing their own life, having the side effect of condemning another to die (as in option 3).

Boonton April 19, 2014 at 7:19 am

I doubt any egalitarian that exists in the real world would respond with #1. They might respond with something like ‘flip a coin’ which would give each patient an equal chance of getting the room, but I doubt they would say let the room sit empty as both patients die.

Thomas Esmond Knox April 19, 2014 at 7:08 am

Nice to see that Marginal Revolution has kicked up a few gears.

Thank you.

Dan Hanson April 19, 2014 at 2:22 pm

For a doctor to start a procedure or prescribe a drug, the patient is supposed to give informed consent. That means the patient has had all options explained to her, and agrees to the treatment suggested. If the doctor witholds treatment information, he is not informing the patient.

The first time someone dies of an illness and the family discovers that treatment options were witheld for the ‘good of society’, that doctor had better lawyer up. Deservedly so.

I need to trust my doctor’s advice. If I discover that my doctor ‘balances’ my care against the needs of the state, it will destroy our relationship. Does it benefit society to make parients distrust the advice of their doctors?

Jan April 19, 2014 at 8:27 pm

But we need tort reform in order to save health care. How can we sue doctors for taking cost of treatment into account if we reform the torts?

Boonton April 20, 2014 at 7:27 am

From what this article described, the most common decision point happens when you have two different treatments that differ in cost but are either equal in terms of quality or it’s at least a toss up as to which is better or worse.

In a case where you have one treatment that is more expensive but clearly better, it would be a much clearer case against the doctor if she neglected to even alert the patient to the better option.

Ed April 20, 2014 at 9:11 am

This is what doctors have believed ever since the beginning of medicine as a practice. Health care is just as much a right as a fair trial; it’s also an easier one to uphold in practice.

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