# Medical care and comparative effectiveness

The idea is to have a commission examine which procedures should not receive full Medicare reimbursement. I favor spending cuts for Medicare so for me it's a go. Megan McArdle considers some basic issues. I'll add or second a few points:

1. When it comes to health care, it's very hard to tell what works. That's one reason why we don't pay doctors for results in the first place but rather we pay them for procedures. Having a commission look at statistics only partially remedies this problem. Sometimes looking at outcome statistics from the broader population pool makes the estimate of treatment efficacy clearer and other times it makes the estimate of treatment efficacy fuzzier (you have more data points, but not everyone responds to a treatment in the same way).

2. Where will the burden of proof be put? Will the common procedures be the only ones to receive the funding axe (they're expected to prove themselves in the statistical court, so if they can't the funds dry up?) Will "small numbers" medicine receive the benefit of the doubt or be required to prove itself? The answer to this question will make a big difference.

3. Let's

say a treatment for 1000 people helps only 20 of them and so the

aggregate statistics for that treatment are not so impressive. If you

take those same results and define the population pool ex post as the

20 people who respond positively, suddenly the same treatment has a

success rate of one hundred percent. Again, framing will matter a

great deal for the results.

4. This commission, if it sticks to its statistical mandate, will be able to recommend many more possible cuts than any vote-maximizing administration will be likely to make. Some other principle will be used to determine cuts. Many defenders of the Obama administration are overestimating how scientific this process will be.

5. What does the public choice equilibrium look like? Should Medicare "strand" some chronic ailments, with large numbers of people suffering only moderately, or should the occasional person be allowed to "die in the street"? Any spending cuts policy will generate news stories of one kind or another; which will have greater political resonance?

6. The fairly arbitrary cuts we get will in some ways resemble means-testing. The discretionary procedures are mostly enjoyed by higher-income and higher-education groups.

7. Imagine an analogy from broader life. Imagine a government that would cut (some) subsidies for any input which could not be shown, statisically, to causally produce better outcomes in life. You can see how open-ended this would be. What if you applied this same metric for your personal spending? Would there be much left to spend your money on?

**Addendum**: Read the highly intelligent Arnold Kling.