Have Your Cake and Eat It Too

The right in the US loves to rant about health care reform. The call it "socialism" because the government is going to decide for you what and where and how you get health care. The government is going to set up "death panels" and make decisions of life and death. Sounds dreadful.

But the truth is, for any economic commodity, somebody gets to decide who gets what. In the old command economy, the king got first dibs on everything, left some crumbs for his aristocratic friends, and let the serfs live at or below subsistence level. The theologians argued this was "just" because this was the natural order deigned by God.

In a free market, access to goodies is determined by wealth. In an ideal world of "meritocracy", those with the greatest talents and worked the hardest would have the most money so they would have first access to the goodies offered by the economy. Those who were mediocre would get substantially less. And, in a truly capitalist economy, the sick, the lame, the ignorant would be left to starve because they of course had no "merit".

We don't live in an aristocracy. And thank goodness we don't live in a "free market meritocracy". We live in a society with rules that ensure a certain level of basic decency for everybody such as access to a free public education, access to free public streets, etc.

But for some reason, in the United States, the public has decided that health care is not a basic right. It is an economic good to be rationed by the economic system. So a guy like Bill Gates, can have all the medical care for himself and his dogs and pet toads as he wants. Those who fall into the desperately poor camp get social assistance. But the working poor fall into a black hole. They get no assistance and they have such low incomes they can't afford anything but emergency room "medical care". That is a tragedy.

Anyway, here is Greg Mankiw in an NY Times opinion piece implicitly giving his smug, self-rationalizing about why the current system is the Goldilocks solution:

Not long ago, I read that a physician estimated that statins cost $150,000 for each year of life saved. That approximate figure reflects not only the dollars patients and insurance companies spend on the treatment but also — and just as important — an estimate of how effective it is in prolonging life. (That number is for men. Women have a lower risk of heart disease.)

That estimate is, at best, approximate, but it certainly suggests that preventive care is not always cheap. The magnitude of the figure also brings to mind hard questions of political philosophy.

Imagine that someone invented a pill even better than the one I take. Let’s call it the Dorian Gray pill, after the Oscar Wilde character. Every day that you take the Dorian Gray, you will not die, get sick, or even age. Absolutely guaranteed. The catch? A year’s supply costs $150,000.

Anyone who is able to afford this new treatment can live forever. Certainly, Bill Gates can afford it. Most likely, thousands of upper-income Americans would gladly shell out $150,000 a year for immortality.

Most Americans, however, would not be so lucky. Because the price of these new pills well exceeds average income, it would be impossible to provide them for everyone, even if all the economy’s resources were devoted to producing Dorian Gray tablets.

So here is the hard question: How should we, as a society, decide who gets the benefits of this medical breakthrough? Are we going to be health care egalitarians and try to prohibit Bill Gates from using his wealth to outlive Joe Sixpack? Or are we going to learn to live (and die) with vast differences in health outcomes? Is there a middle way?

These questions may seem the stuff of science fiction, but they are not so distant from those lurking in the background of today’s health care debate. Despite all the talk about waste and abuse in our health system (which no doubt exists to some degree), the main driver of increasing health care costs is advances in medical technology. The medical profession is always figuring out new ways to prolong and enhance life, and that is a good thing, but those new technologies do not come cheap. For each new treatment, we have to figure out if it is worth the price, and who is going to get it.

The push for universal coverage is based on the appealing premise that everyone should have access to the best health care possible whenever they need it. That soft-hearted aspiration, however, runs into the hardheaded reality that state-of-the-art health care is increasingly expensive. At some point, someone in the system has to say there are some things we will not pay for. The big question is, who? The government? Insurance companies? Or consumers themselves? And should the answer necessarily be the same for everyone?

Inequality in economic resources is a natural but not altogether attractive feature of a free society. As health care becomes an ever larger share of the economy, we will have no choice but to struggle with the questions of how far we should allow such inequality to extend and what restrictions on our liberty we should endure in the name of fairness.

In the end of our day of philosophizing, however, we face a practical decision:

Who gets the magic pills, and who pays for them?

For those on the right who talk about "death panels" this is a smoke screen. There already is a death panel. It is called "price". If you can't afford appropriate medical care you die early. Nobody I know of is saying "spend $150,000 on medical care for everybody!" No. What people are calling for is a way to more equitably allow access to medical care. The rich will continue to get their deluxe version of medical care. The poor will still get their cheap state-subsidized care. The big difference is that the working poor would get access to appropriate medical care, early intervention, diagnostics, preventative care which would in fact bring down costs because the medical care would be delivered in a more timely way.

But this isn't what the press focuses on. Instead they love to play up "death panels" and crowds of angry people carrying signs about "socialized medicine" and picture of Obama as Hitler. The press isn't interested in the story of social justice or the horrible bind that the working poor find themselves in (or the under-insured middle class). That doesn't sell papers.