The Agenda

The Epistemology of Death Panels

Aaron Carroll of The Incidental Economist was not fond of my recent piece on state-sponsored end-of-life counseling. (As an aside, if you haven’t already, read Rich Lowry’s piece on the subject, which is basically perfect.) In my original post, I described the difference between the Left and Right on healthcare this way:

The Left’s solution is rationing: the government should determine when individuals are seeking care they don’t need, and prevent them from obtaining it. The Right’s solution is privatization: let individuals pay for the care they want, even if that means that some people are able to afford more care than others.

To which Aaron replied:

I’m sorry, but this simply isn’t true. I think [Avik is] accurately representing the position of many on the Right. But not the Left. I would say that the position of many on the Left (and it’s the “Lefty-Left”) is that government should determine what care individuals need and pay for that. For everything else, let individuals pay for the care they want, even if that means that some people are able to afford more care than others.

Notice the difference? Avik implies that the Left wants to tell you that you can’t have care you’re willing to pay for. That’s simply not true. Avik implies that the Left wants to let the government tell you that you can’t have things even when you want to pay for it out of pocket.  I have met no one – at least no one serious – that wants this.

Actually, both sides claim the same things as virtues. As per Aaron’s formulation, the Left seeks a base level of health care that is guaranteed for everyone. Anything above that, the government doesn’t pay for. Sounds reasonable enough.

However, the Right, too, seeks a base level of health care that is guaranteed for everyone, upon which the rest is left up to the individual.

So, if the Left and Right want the same thing—a base level of health care for everyone, upon which individuals can seek optional supplemental care—why are we fighting so much about health policy?

It’s because there is a gulf as wide as the Atlantic Ocean between what liberals and conservatives see as the “base level of health care” that should be guaranteed for everyone.

For conservatives, it’s catastrophic care. Outside of hard-core libertarian circles, conservatives agree that, if a woman crossing the street gets hit by a car, we should try to take care of her, regardless of her ability to afford health insurance. Outside of catastrophic care, however, health care would be far more efficient if individuals purchased consumer-driven health insurance for themselves from private insurers. (See my piece in National Affairs for a long-winded exposition of this subject.)

For the hard-core Left, there is no “base level of care.” All care should be covered, for everyone. Health policy wonks in the progressive mainstream typically take a more pragmatic view, acknowledging that we can’t afford to cover everything, so we should instead cover just about everything, except for those things that aren’t “cost effective.”

In the conservative vision, individuals decide what care isn’t cost effective: by choosing not to purchase it. In the progressive vision, the government decides, because individuals are neither competent nor wise enough to make these decisions for themselves. (Economist Ken Arrow came up with a more refined term for this view: “asymmetrical information.”)

What does this have to do with death panels? Precisely everything.

The entire reason death panels exist in Britain is because, when the NHS was founded in 1948, few people understood that making health care “free at the point of care” would lead people to use more of it: much more. To the point that today, in Britain, the U.S., and nearly every other country, health care is sinking the budget.

No country with a socialized system, including ours, has found the political will to attenuate the universal, unlimited health care entitlement, once installed. So governments come up with politically non-transparent ways to deal with the problem. One routine tactic is to pay doctors and hospitals and companies less for their services and products, leading to poorer and poorer quality.

There comes a point, however, when you’ve cut all you can cut out of hospitals’ and doctors’ pay. At a certain point, the brightest people stop applying to medical school, because they can make more money by going to law school or business school instead. At a certain point, the cost of care becomes greater than what the government pays you for that care, leading providers to do the rational thing and stop providing care. This is why we keep tweaking the notorious “Doc Fix”: because we’re already dramatically underpaying doctors for taking Medicare and Medicaid patients, relative to what they can make treating privately-insured patients.

At that point—the point at which you’ve used up all the politically easy ways to cut health-care costs—you have to start reducing the actual benefits that government-sponsored health care beneficiaries receive.

Indeed, as Bill Gardner points out, this is already happening at the U.S. state level. Arizona has begun denying Medicaid reimbursement for organ transplants. I’m not sure why, but Bill seems to see this is a rebuttal to the argument that government-sponsored health care inevitably leads to death panels. Quite the opposite.

All you have to do is see the hyperbole surrounding Paul Ryan’s exceedingly modest plan for Medicare reform to know that reducing Medicare benefits is politically difficult. So, what is the PPACA-led alternative? The Independent Payment Advisory Board, or IPAB. Peter Orzsag, Donald Berwick and other IPAB advocates hope that the new body will ultimately become an effective tool for doing exactly what the NHS does: denying state reimbursement for treatments that a group of unelected experts believe to be less useful.

I get that progressives recoil at the term “death panels.” But whatever you call them, there is simply no substantive difference in what the British NHS does today, with its National Institute for Health and Clinical Excellence (NICE), and what the founders of IPAB aim to do. Aaron himself agrees:

I think some on the Left want to use public money to pay for care, but think we can have a panel of experts (which should include physicians) try and determine which care isn’t worth the money and stop spending as much public money on that. This will mean that if individuals want to get that care anyway, they have to pay for it themselves…to some out there [this] is evidently a “death panel.”

Indeed, this is the heart of the controversy: should an unelected group of experts decide whether it’s worth spending money on the care of an individual? To progressives, the answer seems to be “Yes, obviously; individuals aren’t sophisticated enough to make these decisions for themselves.” To conservatives, the answer is “No, obviously; even if I didn’t go to medical school, I have the right to make these decisions for myself and my family.”

What I’d like to flesh out is the philosophical consistency. To the progressives who claim that IPAB isn’t meant to be a death panel: are you opposed to what NHS’ NICE does; i.e., approving reimbursement for procedures and products based upon their utilitarian impact on quality-adjusted life years? If so, why? And what method of measuring cost-effectiveness would you put in its place?

Avik RoyMr. Roy, the president of the Foundation for Research on Equal Opportunity, is a former policy adviser to Mitt Romney, Rick Perry, and Marco Rubio.


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