U.S. Health Care, Now and in the Future

A friend of mine had heart bypass surgery three weeks ago. He’s a healthy, fit, and active 86-year old, but started feeling bad one day and ended up in the hospital. The next day he had an MRI, which showed significant arterial blockage, and the day after the MRI he had his bypass surgery. I talked with him yesterday, and he’s on the road to recovery.

As we in the United States debate health care reform, one of the key components President Obama talks about is eliminating unnecessary procedures. That is just another way of saying we’ll ration health care. It may be that many health care procedures today are not cost-effective, but they are probably not unnecessary in the sense that the doctor and/or patient don’t think they provide some health benefit. There are few health care procedures that would fall in the category of “pleasant,” so even if they were “free,” few people would want procedures that would not provide some benefit. (That may not be true of providers, who earn income from the procedures.)

In Canada people wait an average of three months for MRIs, so if my 86-year-old friend was in Canada, he would probably still be waiting for his MRI, if he could get approval for one. In Britain, determining whether procedures are cost-effective is calculated by valuing an extra year of life at $35,000 (this figure, and the MRI waiting time both come from the National Center for Policy Analysis), so it may be that my 86-year-old friend would not even have had bypass surgery were he in Britain. It might not be cost-effective for someone that old.

In the abstract, it sounds like a good idea to eliminate unnecessary procedures, and to eliminate health care expenses that aren’t cost-effective. In reality that means that some people won’t get as much spent on their health care as they would have without the reform. That’s still pretty abstract, so I’m thinking about it in the context of my friend. The way we are reforming health care, would he have gotten the MRI? Would he still be waiting for it? Would he even be eligible for bypass surgery?

There is no way we can answer these questions now, because even if we pass legislation this year, the consequences will only become evident in future years and this year’s legislation will surely be altered. Massachusetts, which passed its reform requiring everyone to have coverage in 2006 is finding its health care expenditures well above projections, and is looking for ways to cut costs. Surely any U.S. health care reform passed in 2009 will need to be modified in the near future too, as its actual consequences are revealed.

As to whether my friend’s MRI or bypass surgery were necessary, or cost-effective, I don’t have a good answer. But the way things are shaping up, it appears increasingly likely that ten years from now he wouldn’t get the MRI, and might be put on medication rather than getting the surgery. To practice cost-effective medicine and eliminate unnecessary procedures means rationing, and it appears that government bureaucrats will replace your doctor in determining what treatments you actually get.

Randall G. Holcombe is a Senior Fellow at the Independent Institute, the DeVoe Moore Professor of Economics at Florida State University, and author of the Independent Institute book Liberty in Peril: Democracy and Power in American History.
Beacon Posts by Randall G. Holcombe | Full Biography and Publications
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