Wednesday, August 12, 2009

Health Care Rationing: It Does Make a Difference Who Decides

Writing for, Christopher Beam argues that health-care rationing should not be considered such a big deal, since rationing is already happening in the private sector. And so we shouldn't worry, he concludes, about the government rationing, too. Yet as we shall see--in fact, as we already know--most Americans do not agree with Beam’s sunny view of state power.

Beam writes in his don't-fear-the-government-rationer piece:

The notion that health care reform would result in insurance companies withholding treatment based on a person's age or health—essentially putting a price on their life—persists. But what this criticism ignores is the fact that the system already puts a price on life. It's just not the government that decides it.

Beam is correct about the reality of private-sector rationing. On any given day, patients, families, health care providers, and insurance companies are groping their way toward solutions--sometimes nicely, sometimes not-so-nicely, as in the case of Blue Cross of California, which apparently incentivized its employees to rescind--that is to say, gyp--its customers who filed claims.

But in minimizing concern about public-sector rationing, the writer misses, or chooses to miss, the nature of popular concern about “government-run health care.” If the subject is insurance companies, we might take note of insurance bureaucracies, such as the state-run Oregon Health Plan, which was not willing to fund cancer treatment for a patient, but was willing to fund her suicide pills.

To put it bluntly, governments everywhere are scary to people. And not without reason: The University of Hawaii’s R.J. Rummel estimates that 150 million people were killed by their governments in the 20th century. Here in America, of course, we haven’t had that problem, although significant numbers of Americans, at one time or another over the last 100 years, have been open in their admiration for such mass-murdering regimes as Stalin’s Russia, Hitler’s Germany, Mao’s China--and even the Cambodia of the Khmer Rouge. So a certain steady watchfulness toward state power is always advisable; if we aren’t vigilant, it can happen here.

Yet aren’t big corporations also scary? Sure. And they, too, have been known to kill people. But ordinary Americans figure that as long as they have options and choice, they can fight the insurance company and win, or shop around for better treatment, or wangle medicine, or squeaky-wheel a better health-deal out of an ombudsman somewhere. They might be wrong in their optimism, of course, but there’s a logic to such thinking: In a multipolar system, there’s always the chance of successfully playing one pole off against another.

But what would happen with only one pole? If the government ran everything? One thoughtful observer, Mickey Kaus, argues that the government will always be a soft touch when it comes to paying health care bills. Kaus, a proponent of health care reform, makes a good argument, but suffice it to say that average Americans are not convinced.

Because even the American government is scary to many people. Do we trust Washington DC? Should we trust Washington? Can we trust Washington? As we are seeing on the news, these are all hot questions in Flyover Country.

Camille Paglia, the distinguished cultural critic--and an avowed Obama supporter-- wrote recently in, “As a libertarian and refugee from the authoritarian Roman Catholic church of my youth, I simply do not understand the drift of my party toward a soulless collectivism.”

And then Paglia continued:

This is in fact what Sarah Palin hit on in her shocking image of a "death panel" under Obamacare that would make irrevocable decisions about the disabled and elderly. When I first saw that phrase, headlined on the Drudge Report, I burst out laughing. It seemed so over the top! But on reflection, I realized that Palin's shrewdly timed metaphor spoke directly to the electorate's unease with the prospect of shadowy, unelected government figures controlling our lives. A death panel not only has the power of life and death but is itself a symptom of a Kafkaesque brave new world where authority has become remote, arbitrary and spectral. And as in the Spanish Inquisition, dissidence is heresy, persecuted and punished.

One doesn’t have to agree with Paglia, or with Palin, to see that public opinion is being moved. And that’s why a new Rasmussen poll now shows that a majority of Americans oppose Obamacare.

And there’s plenty of theory, too, supporting the argument that government does a lousy job at making nuanced, fine-grained decisions--such as who lives and who dies. And that’s why people fear public-sector rationing, even more than private-sector rationing.

The central argument of the Austrian School of Economics is that the state is simply not smart enough to make these sorts of important decisions. Austrians Friedrich Hayek, Ludwig von Mises, and others denied that it was possible for someone sitting in an office building to figure out how to maximize the welfare of the population outside of that office building. Taken to an extreme, Austrian thinking denies the possibility of government doing any good at all. But of course, most people agree that some things are public goods and make life better--which is the argument for Serious Medicine.

And so as a practical matter, it's easier for the government to create public goods that benefit everyone--than it is for the government to get in the middle of intensely personal decisions over life and death.

Yet that’s the mistake that the dominant faction of health care activists--the people who pushed Hillarycare in 1993, and the people pushing Obamacare today--keep making. These people--known as “Qalys," for Quality-Adjusted Life Year--have a strange zeal to insert themselves into discussions and deliberations that most Americans think are none of their business. In times of extreme need, people might take advice from family, from friends, doctors, clergy or therapists. Or they might just decide to do something on their own. But in grave moments, probably the least welcome interloper would be a government bureaucrat. Perhaps such fearful sentiments are irrational, based as they might be on the primordial fear of strangers. Or perhaps such fears are based on the well-grounded sense that government officials often operate from motives substantially different from those of ordinary folks. Either way, that’s the way people feel, and one would think that over time, health care crusaders would grow more respectful of the voters. But apparently not.

We might sum up the Politics of Serious Medicine argument like this:

First, we do have a duty to care for one another. Health, especially public health, is a matter of not only compassion, but also of enlightened self-interest.

Second, we should realize that we will likely never know enough to make good judgments about other people’s health; indeed, it’s unlikely we will be asked what we think. Sometimes, to be sure, the state has to step in. But we should know that such state interventions are the bluntest of blunt instruments.

Third, the best approach, therefore, is to widely distribute “public goods”--that is, goods which improve overall public health and advance medical R&D. These “health public goods” can be reasonably expected to help just about everybody. The same broad logic applies to parks, police protection, and environmental cleanup, among other public goods--these goods are popular because they benefit everyone. And the same with Serious Medicine.

Help people become healthier, and they will vote for you. Tell them that it’s time to die, and they will vote against you. The politics of health care are not that complicated.

Errata: Thanks to alert reader Melissa Pehle-Hill, I fixed an error about the Oregon Health Plan-it's a public entity, not a private company.


  1. April 29 (Bloomberg) — President Barack Obama said his grandmother’s hip-replacement surgery during the final weeks of her life made him wonder whether expensive procedures for the terminally ill reflect a “sustainable model” for health care.

  2. How can Health Care be rationed and Doctors not be exposed to malpractice at the same time? Doctors now order a lot of tests just to prove they aren't practicing 'malpractice.'
    So that doctors can truly practice medicine without worry about an attorney screwing them, then the first order of health care change is TORT Reform. Then doctors wont have to ALWAYS order an x-ray when setting a broken bone and driving up costs unnecessarily.
    It is not an easy subject that you are writing on and this column is very balanced Jim. What we need is a diagram for rebuilding health care from the foundation up, like a house.
    A Ross Perot approach would be very helpful here. Obama, are you listening? But the problem is the Bureaucrats want one big (1.000 page) health bill so that they can determine what to give us as they damn well please.
    To pass good health care the best way will take between 20 & 40 bills, not one monster. You start with the basement, then go design a kitchen, dining room, den etc.
    And having had 3 hip replacements myself, Obama is correct to wonder why in the name of God are we giving an old woman on deaths door such an operation?
    I'm tired of seeing old people used to just drive up SALES.

  3. People who work in healthcare know that reform must be bottom-up, not top-down if we are to eliminate the costly contradictions, disincentives and incentives-to-do-the-wrong-things, medically, that exist where the rubber meets the road, where the healthcare dollars are being spent. As far as rationing goes, it's not just the Qalys that play a part in rationing...there are actual, extant limitations on equipment, hospital beds, numbers of physicians, available nurses, what Medicare will reimburse for and where and how, etc., et al. that all contribute in important, impactful ways to a person's inability to get the care they may need...right now.

  4. What I find scary is that our political class finds it impossible to have a serious public discussion about the tradeoffs involved in their health reform plans. It's taken as axiomatic that they must appear to offer all things to all people, with no downsides affecting anybody but a negligible portion of the population in the other party's core political base. Obviously, signficant tradeoffs have to made, so the public is left to grope in the dark about how this is really going to play out. And this incapacity for honesty, which affects the leaders of both political parties, leads one to infer that the decisions, as all decisions made in the dark tend to be, will be driven by specail interest politics. This debased quality of public deliberation is largely driven by the public, which is pervaded by wishful thinking and self-indulgence.

    Jim, your commentary does suggest that you are seriously trying to grapple with these issues. But it would inspire more confidence in me if you had gotten into the weeds a bit more. Your big picture perspective is appropriate for a pundit writing for a general audience. But if you want to win me over, you've got to prove you've actually read and understand the details of the healthcare plan and understand how it compares to other similar plans that have also been tried. You've also got to prove that you understand how serious a problem we have with our current health care system. Of course, just because there is a serious problem--like the Arab-Israeli conflict--doesn't mean that the solutions proposed by our political leaders wouldn't make the problem even worse. But intellectual seriousness requires not dismissing the extent of the problem. It's one thing if our political class cannot engage in serious discussion; let's try to make sure that our opinion leaders don't succumb to the same temptation.

  5. American government has never killed its own people? Must be you weren't around during the draft in the 60's. Check out that wall in D.C.

  6. If the consequences of Obamacare is so "dire" the GOP and other critics should "secretly" let it pass. People vote. If the consequences are "dire" the people will vote overwhelmingly for the GOP and Obamacare can be repealed!!! I think the real "dire" consequences the GOP is terrified about is success!! A hell of alot more voters (previously without any medical coverage) will be voting democratic than republican if Obamacare is enacted. I think the GOP is afraid that Obamacare will have the opposite effect of what the Iraq adventure did to them in 06 and 08.