A Conversation On Health Economics

Me and the other guy had a chat.

The Other Guy:

Reading Singer and Mankiw’s pieces on the rationing of healthcare, and why it is likely necessary in the United States (DEATH PANELS!!), for me illuminated what we’ve learned is the fundamental issue in economics: how to distribute limited goods.

While some may view death panels, or NICE, or whatever you may like to call it, as “taking away the opportunity to live an extra six months with their friends and family,” it is important to recognize, as Singer does in his piece, that these last six months of life may in fact be of poor quality. As Singer puts its, the QALY for these last six months would be low if those last six months were spent sedated in a hospital bed unable to actually enjoy yourself.

Additionally, the last months of life are often the most expensive medically, so in addition to the cost of Sutent you would have intensive end of life costs as well. One way to reduce these costs, and to improve quality of life in the last months of life, would be to have a living will.

Unfortunately, language originally included in the Affordable Care Act which would incentivize end of life planning was removed due to beliefs that it would force end of life decisions to be made for individuals instead of the actual fact that individuals themselves would be able to make these decisions. As Singer puts its, the QALY for these last six months would be low if those last six months were spent sedated in a hospital bed unable to actually enjoy yourself.

End of life planning could significantly improve life quality near the end of life and save the health care system money, but people’s inability to talk about or confront their own mortality makes this conversation more difficult than it needs to be.

Mankiw asks a similar questions: “is it worth it?” And the answer may be, “no, for someone your age and in your health this medication will not significantly lower your mortality rate.” In this instance, if a medication is not likely to lengthen or improve quality of life, this may be a reasonable decision for a doctor to make.

While questions such as this are difficult to ask, and even more difficult to answer, it will likely be necessary if we hope to continue bending the cost curve of healthcare downward. And quality of life need not decrease, people simply need to know what they’re getting themselves into.


My Reply:

I think it’s interesting that you agree with Singer QALY would be low. According to who?

Utility is an arbitrary scale created in the preferences of the individual. Being faced with death can create an immense appreciation in the value of a person for their own life. It could very easily be the case that despite being confined to a bed, a person would rather be alive than dead by a wide margin of utility.

Why do you think that the best entity to judge the size of this margin of utility is an information-limited central government rather than the individual him or herself?

It seems to me that if a person has one thing they would like to consume with their own hard-earned money, health quality, and the government prohibits the consumption of that good, then the government has very obviously and directly injured such a person in the strictest meaning of the word. Do you really think government should really be able to tell such a person that they cannot even spend their own money on the most basic of things, their own survival?


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