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TECH/POLICY: A prime example of how health care works, sort of.

The continuing fuss about the Cutler article rumbles on. Here’s the Scientific American article that I’m quoted in. You’ll note that I may seem a little extreme (“rubbish”) but I was interviewed before I’d seen the article (or even knew that it was coming out!) and the reporter told me that the number for a year of life was between $100,000 and $200,000. But the question is still “worth it compared to spending the money on what else?”

Meanwhile the answer from David Henderson at Hoover (the guy I challenged on the local NPR call in show —on the MP3, my piece is cut out totally! The response is at 44.14) remains “we’ve picked the low hanging fruit, so it will be more expensive to move the needle as the years go by.” I wasn’t given the chance to say a) the industry has co-opted the government so it’s not like there’s a real “choice” in how we spend the money, and b) perhaps we’d get better value for money picking low hanging fruit in some other area of our society. In other words there are diminishing marginal returns from the flat of the curve medicine—so perhaps we should think of spending the money elsewhere? Meanwhile a few others have picked up on that. In the Huffington Post, Merrill Goonzer (yes that’s really a name!) from the Center for Science in the Public Interest points out the other part of the problem—“we may be paying for an Aston Martin but we’re getting a Ford”.

And when the status quo proponents say “costs are going up in other countries too” you can note that in 1970, health care costs in Canada and the US were the same as a share of GDP—and they’re not now! And in the 1990s both Japan and Canada reduced health care costs as a share of GDP. So societies can make choices about this, even if ours politically won’t. In fact in the last decade the Brits made a conscious choice to increase the amount of money they spend on health care—with some interesting consequences.

Of course the whole thing is totally bogus, as no one thinks of these things other than as ex-post facto justifications, and pretty weak ones at that. There’s a perfect example in the NY Times this morning. It says that Cardiologists Question the Risks in Using Drug-Coated Stents, a story that’s been reported on for a while, and includes a new Swiss study that says that only one in three cases is the use of the drug eluting stent correctly indicated.

Of course three years ago a Stanford health services research group suggested that stents as a whole weren’t worth it on a cost-benefit level, and got totally ignored other than on this blog! So there’s a chance (and it’s a slight chance) that medical counter indications might, just might, slow the spread of a technology that is basically unproven. There’s no chance that saying it’s not cost-effective will slow it at all.

Which kind of proves that arguing about the Cutler article is a waste of time!

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Tom LeithMatt S. Recent comment authors
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Tom Leith
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Tom Leith

So here’s what it takes to move the needle now:
An artifical heartthat under the most generous or optimistic assumptions, costs more than $500,000 per QALY.
But not to worry: according to the WSJ (Subscription Required) even though the FDA has approved the sale of $1B worth of these devices, the company expects to sell only about $10M worth of them, and they are “working with the government and private insurers to develop reimbursement guidelines”.
Wow. I feel much better.
t

Matt S.
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Matt S.

Becker and Posner (U of Chicago Econ Nobel winners) discuss (and do not really agree) the article. It’s a pretty good discussion. In my experience, it’s a little rare for them to not agree to this extent.
The comments to the posts are, um, well…anyway, yeah.
http://www.becker-posner-blog.com/