The Price of Health

MRI, NMI, CAT scan, EKG, DNA analysis, heart transplants, lung transplants, heart-lung transplants. The list of medical miracles stretches longer each month.

The huge biomedical and pharmaceutical establishment employs thousands of talented researchers charged with developing new ways to keep aging bodies young, and weak bodies strong. But the greatest challenge in the future will not be discovering new medical techniques, but discovering how to pay for them.

Headlines trumpet the success of each new medical breakthrough. The public assumes that any new drug or surgical innovation will be translated into common usage with all possible expediency.

Americans have had the fortune of riding the health-care technology tidal wave for many years now. Eighty-five percent of the U.S. population--those Americans who have health care coverage--can take advantage of the most advanced techniques modern science has to offer.

70-year-olds have clamored for kidney dialysis since the technique became available. Teenagers have likewise lusted after nose jobs, and after many years of research and development, doctors (to paraphrase columnist Dave Barry) have discovered the incredible benefits of becoming rich. Each new discovery has translated into longer life expectancies and greater quality of life.

Those heady days are over. Our society has absorbed the increased costs of these new technologies. Unfortunately, we can't afford infinite improvement in health care anymore.

Health care costs rise at an estimated 9 percent per year; that is the single most important figure in the health care debate. The U.S. currently spends $850 billion on health care, more than $3,400 per person. Anyone who understands compound interest can see that our society can't afford to absorb 9 percent annual growth any longer.

The Clinton Administration's health care proposal, and most other health care reform plans under discussion today, try to reduce costs by making the system more efficient. Proponents of health care reform note that insurance companies and the federal government pay for most health care costs, while consumers pay a set premium, no matter how much--or how little--care they receive.

Therefore, reformers argue, the consumer has no incentive to economize. Immunity from high cost leads patients to order expensive tests, even if those tests have little utility. The forces of the free market, which usually reward efficiency and thrift, do not apply to today's health care consumer.

Baker Professor of Economics Martin S. Feldstein '61 has advocated increasing the percentage of the individual's copayment as well as offering rewards for low consumption of health care. His aim is to introduce the magical forces of the free market to Americans' health care decisions. Clinton's plan, a different version of a free market approach, would increase competition among insurers, in the hope that these providers would better spend each health care dollar.

What neither plan explicitly addresses is a way to deal with the inevitable progress of technology. Because the real crisis in health care isn't inefficiency--it's these constantly rising costs, which threaten to stretch already thin resources. Any reasonable plan to manage health care insurance must explicitly address this quandary. Clinton's advisors, the framers of national health care policy, ought to know this.

Whatever emerges from the health care debates will likely force individuals to pay for a larger portion of the health care they consume. Such a plan makes sense from an economic standpoint, but has a hidden effect: Under the new system, many people will not get the best care possible.

In the name of savings, patients will be denied tests that are only somewhat important. New and expensive techniques will go unused. Pharmaceutical and for-profit biotechnology firms will go belly up and research will stagnate.

Before the technological explosion, we could afford to give almost every patient the best available care. But as the per capita consumption of health care reaches and exceeds $5,000 per year, current behavior will no longer be feasible. The new maxim of the health care industry will be economy: the challenge of making the best use of scarce resources.

Such a radical change in the way Americans conceive of health care should be debated openly, not hidden behind words such as "efficiency" and "value." As politicians debate the intricacies of the Clinton plan, they are determining how we will apportion life itself. Strangely, few seem interested in acknowledging this fact.

Should we shift money from other areas to ensure that all people receive the best care available? Should money be the sole determinant for apportioning health care, as it is for so many other commodities--or does health care, by its very nature, transcend mere monetary concerns? Should age play a part in determining who receives a kidney or heart transplant? People have a right to know how the health care debate will fundamentally change the face of health care.

At an IOP debate last month, Marc J. Roberts '64, a professor of political economy and health policy, noted that we laud researchers for developing techniques which are radical in their use of new technology, but which may give only incremental benefits in actual care. Perhaps we should try to increase the efficiency of old techniques, or develop technology with an eye toward maximizing the bang for the buck.

There is a limit to the financial resources our society can devote to health care, and we are approaching this limit quickly; health care now consumes 14 percent of the GDP. In the coming years, we must work to get the most social benefit for the money we spend. As we continue to develop the technological resources to extend life and cure disease, we may have to abandon some of those developments.

For many Americans, a frightening effect of the inevitable rationing of health care dollars will be an inability to use all of the lifesaving means available. We may have to stop spending hundreds of thousands of dollars to add three months to an 80-year-old's life. As callous as it may sound, we will have to start viewing life in terms of dollar figures.