Thinking Honestly About Healthcare

I am amazed (and more than a little dismayed) that after years of debate about government intervention in the healthcare system, that there is still almost no rational conversation about the need to make tradeoffs to ensure better coverage for more people. Basically, the assumption on the right is that we already pay a lot of money to cover seniors and the poor, and we can't afford to massively expand government to increase benefits further. The liberal response is that it is a moral imperative that everyone have healthcare, and besides it will be more efficient than the system we have now. (For a nice summary of these arguments, read this Ross Douthat post and the responses below.)

But all of these arguments fail to account for the rapid pace of healthcare innovation. Or if they do account for them, it is with the assumption that everyone is entitled to the latest medical breakthroughs as soon as the FDA approves them. And I suppose, if you view 'health' as a right without any context, that makes sense. But that view, barring an amazing breakthrough that radically lowers treatment costs for chronic diseases, leads directly to national bankruptcy. The costs of new therapies, and the prevalence of heart disease, diabetes, cancer, Alzheimer's, and other conditions, will combine to swamp us.

Let's just talk about death for a second. (Sorry for the downer.) There are about 43,000 automotive deaths a year. A recent study (which I will for this argument accept uncritically) projected that there are about 45,000 deaths a year associated with lack of insurance. Now, lets hypothesize that automotive engineering advances, and new cars on the market dramatically reduce accident deaths. Putting people in the riskiest vehicles into these new cars could dramatically cut into that mortality rate. Would that be a moral imperative? Is there a right to these new safer cars? I think most would argue that the cars are a blessing, but would expect them to gradually replace older cars over time, and would accept the inevitable loss of life in the interim as an unavoidably tragedy, part of the cost of slow, uneven human advancement.

A lot of people, I'm sure, would say this is a ridiculous argument. But the cost of health insurance, annually, is priced somewhere between $5000 and $7000 per adult. That's somewhat more than my annual payments on a (very safe!) Honda Element. And don't expect those costs to go anywhere but up in the future. Most of the drugs being developed aren't easy-to-mass-produce chemical compounds, but more exotic and costly treatments like biologics, which are now used to treat everything from cancer to arthritis to psoriasis. The cost of a year on Enbrel therapy, for example, is about $12,000. These drugs aren't just more expensive to develop, they're more expensive to produce, so even the eventual generic versions will be expensive compared to the drugs we're used to.

So here's my point: I'm in favor of expanding healthcare assistance for those who can't afford their own insurance, but it should acknowledge the reality that some of the newest drugs may be too expensive to pay for in these plans. If I were to sketch the rough outline of such a plan, it would cover generic drugs, basic preventative care, and some sort of catastrophic coverage with a high deductible that would protect against life-threatening problems. (Over time, I would apply this model, with some variations, to existing government healthcare programs.) Will some people have sub-optimal outcomes on this plan? Absolutely. But the idea that we can afford to give everyone access to the latest healthcare innovations is a puppydogs-and-ice cream fantasy we can't afford to indulge in.