The Cost of Life

Mark Thoma links to a medical paper that brings up the issue that few people want to talk about: at what point is the cost of medical care to extend life not justified? Like Thoma, I don’t have a great answer, except to point out that in a world of scarce resources, the answer cannot be that any effort to extend life by any small amount is always a good idea. (And as David Leonhardt explained, our health care system is certainly constrained by scarce resources, whether we like it or not.)

I just have one observation and one recommendation.

The observation is that our political and legal systems already put price tags on life routinely. If you die on the job, the workers’ compensation system calculates how much your life was worth; if you are killed as a result of someone else’s negligence, the tort system does the same. In either case, the calculation is primarily based on your expected earnings for the rest of the life; in other words, young high-earners are worth more than old poor people. And for virtually everyone, the number you end up with is much less than the value implied by the cancer treatment discussed in the paper Thoma cites.

I’m no fan of that system. I’m just surprised that as a society we can be so brutal and inegalitarian in one sphere and so touchy in another (health care, where the thought that any life-extending treatment might be too expensive is probably considered morally abhorrent by most people).

The recommendation is that if you are interested in this issue, you should listen to Dr. Robert Martensen on Fresh Air. Martensen is not only a doctor and a bioethicist, but at the time of the interview I believe (my memory might be failing me) he was dealing with the imminent death of one of his parents, and the medical choices involved.

By James Kwak

59 thoughts on “The Cost of Life

  1. The only reason there is not a rich philosophical debate about the “price tag” in the examples you cite is that they both deal with the issue of death after the fact. It is safe to arrive at a figure because no expense is perceived to have the potential to change the facts. It’s a little more complicated if the person is still living.

  2. I remember reading an interesting article (unfortunately I don’t remember where) that gave an alternative methodology for valuing life. It looked at the wages folks were willing to work for at various ages, in risky jobs. The basic conclusion was that people seem to value their remaining life more and more highly the older they get, and are willing to pay more to extend it, and must be paid more to risk it.

    Not sure how it works into things…

  3. If you look at Medicare spending, in 2005, 10% of the population used 63% of the resources. Average cost per patient for that year was $44,220 for the 10% and $2,934 for the bottom 90%. For the 4% of the Medicare population that died that year, the average spent per patient was nearly 4x than for the remaining 96% ($23,047 versus $6,351). From an actuarial perspective, if you can make care more efficient for the top 10%, you can have a dramatic effect on health care costs.

  4. Any discussion of of anything which could be called “rationing” must begin with the fact that the status quo system already rations by wealth, which is morally and rationally the least defensible system.

    Similarly, defenders of the status quo already place the value of anyone’s life at zero, except insofar as he can afford insurance or has a good enough job to get insurance that way. (The much-begrudged Medicaid, or jokes about going to the emergency room, notwithstanding.)

    (The same dynamic is at work with e.g. alleged longer wait times in countries with single-payer or something similar. But only America has a system where so many people can’t get basic, necessary care at all, and whose “wait times” are therefore infinite. Yet this infinity somehow never shows up in the figures given by status quo defenders.)

    In every case it’s heads I win, tails you lose. Social Darwinism is (ironically) coddled and has lies told on its behalf every step of the way, while any prospective human reform is (fraudulently) attacked in the name of values the status quo is never measured against.

  5. Eric W:”It looked at the wages folks were willing to work for at various ages, in risky jobs. The basic conclusion was that people seem to value their remaining life more and more highly the older they get, and are willing to pay more to extend it, and must be paid more to risk it.”

    Interesting. :) There are probably significant individual differences. That aside, it may also be that older people are more realistic about the risk than younger people. For another thing, they probably have lower levels of risk-taking hormones, because of bodily aging. For another thing, fewer risk takers survive into old age than non-risk takers.

  6. Russ: “But only America has a system where so many people can’t get basic, necessary care at all, and whose “wait times” are therefore infinite. Yet this infinity somehow never shows up in the figures given by status quo defenders.”

    Good point about infinite wait times. :)

  7. At what point is the cost of medical care to extend life not justified?

    Wrong question.

    The question is, given finite resources, how is life best improved and extended?

    Clearly spending $20K to extend the life of an 80 year old for another 2 months is not the same as spending $20K to treat a potentially life-long debilitating condition of a 40 year old.

  8. It is true that our political and legal systems already put price tags on life routinely, but often in cases which are just as emotive as the medical care debate.
    Other organisations also put price tags on life, in areas more removed from personal crises.

    One that is often used as a comparison is in road-improvement decisions.

    Imagine the scenario: “5 people die every year in accidents on the dangerous bend in this stretch of road. To divert the road to avoid the bend would cost $10million. Do we spend the money and fix the road?”

    Decisions like this one are taken every day, give rise to a wide range of price tags on life.

  9. There is a dense literature on cost-effectiveness of various health care interventions measured in quality-adjusted life years per dollar spent (QALY). However, unlike Great Britain’s National Health Service, Medicare is precluded from using it by law. It’s Congressionally-mandated standard for approving care is medically defined as “reasonable and necessary,” which leaves the door wide open for providers and family members to go down the road of extraordinarily expensive and marginally useful end-of-life care.

    While we don’t ration based on comparative QALYs, providers (drug, medical device companies, hospitals, etc.) routinely make use of this methodology in making pricing decisions. They price to perceived value, usually choosing a price point near what is unofficially considered the upward bound of an acceptable price to pay per QALY, which is currently around $50,000.

  10. The goal of a healthcare system should be that medical decisions are made only by the patient (or their legal guardian) and their doctor.
    Patients and doctors don’t need second guessing by private insurance companies, government bureaus or professional (sic) ethicists.

  11. The point is that nobody could tell you in advance the extension you get and its quality. Another point is who is going to make the decision about the extension.
    The solution would be to write down clear dispositions for our own treatment in case.

  12. In all honesty, to focus on end of care issues diverts attention from the fact that primary health care is astronomically expensive and the cost to treat healthy people grows by leaps and bounds every year.

    What we need before we reform the system is a true analysis of health care costs in the private sector. WHY DO THINGS COST WHAT THEY DO? We simply cannot control costs if we do not understand the reasons behind the pricing of health care today.

    The docs I’ve talked to in my pursuit of knowledge on health care acknowledge that when billing private insurance, knowing how tightly insurance hangs on to purse strings, they will bill astronomical sums in order to negotiate down to the fair rate they want to get. It’s a wasteful game. Wasteful and silly and a process we can no longer afford.

    We need to figure out how to affordably treat primary care patients for the regular illnesses we see in a healthy lifetime. Then we can talk about how to properly manage end of life health care issues.

  13. One more thing – I’d like to understand WHY the cost of cancer care is spiraling uncontrollably. Why do these drugs cost so much? Is there nothing that can be done to address the high cost of these meds?

    Or is the answer only to limit their application only to those like Ted Kennedy, a patient with a great (federally paid for) health plan and great personal wealth?

    I know a young mother with young children who today is struggling with cancer. She was given the option of going into hospice or aggressively treating her cancer in a way that I am sure is quite costly. She chose to fight, not die. I don’t know if her treatment will ultimately be successful, but in her shoes, I would make the exact same choice.

    I grew up without a mother thanks to cancer, and the idea that patients should forgo treatment due to expense – just give up – when there is a doctor holding out the possibility of a cure – why would a doctor offer treatment if it was ultimately never going to work?

    What’s the point of medicine if at moments like this we don’t do what we can to help patients survive?

  14. It is also worth mentioning the role that end of life care plays in the whole situation. A lot of the costs are created by keeping dying people in expensive hospitals rather than telling them that they have the choice to die in their own homes with their family around them. People also are often unaware of do not resuscitate orders and the amount of pain that resuscitation can cause for the already very sick or elderly. It would also be good if other states followed the Oregon precedent to let terminal patients have the ability to choose the time and place of their death.

    My aunt who is a vet is convinced that people would be less willing to go to extraordinary measures to keep their parents and grandparents alive if they knew the cost.

  15. Since I do health care cost-effectiveness analysis for a living (in part), I could go on for pages about what they are and aren’t good for. But, for now, I’ll confine my attention to that $50,000 figure.

    The best defense that can be made for that “threshold” is that it is an easy-to-remember round number. Its origins are mysterious. It is often attributed to an early article by Laupacis, but a search of his writings shows that to be an urban legend–and he denies ever advocating it. Some say it represents the results of an early analysis of the cost-effectiveness of dialysis treatment.

    Whatever its origins, it has been kicking around for decades and has never been adjusted for inflation! Also, the same number is often used in other economies, denominated in pounds or Euros.

  16. Why can’t people deal openly with this issue?

    Isn’t it morally wrong to spend more public money keeping alive an 80 year old with medicare than a 20 year old without insurance?

    And what is so wrong with allowing the rich to spend their own money on extra care or extra insurance?

    A reasonable role for private health insurance would be to provide treatments beyond those offered by a public plan.

    I think many people would be satisfied to take their chances and accept that public health insurance should only do what is fiscally affordable to keep them alive.

  17. The socialists in this thread miss the point.
    Whether or not some bureaucrat now puts a value on life does not mean it is appropriate or right.

    The proposed public option morphing into single payer is a coercive system. To work the way socialists want it to , the system must by it’s very nature take away people’s rights. It must decide who dies and who lives and to what extent those who live receive medical care.

    Our government was formed to give every citizen life, liberty and the pursuit of happiness, not free or guaranteed medical care. To provide such guaranteed medical care, the public option system would surely deny people’s liberty, often their lives and more often than not their pursuit of happiness. That coercive system would also violate every citizen’s right to equal protection and the tenth amendment’s limits on Federal power.

    What I want to know is what gives the socialists in our midst the power to take away people’s rights?

    Whether some people think that the expense of current critical care medical treatments for diseases like cancer, de facto rations care also misses the point, and that point is debatable.
    No government has ever effectively guaranteed the care or the economic livelihood for its citizens cradle to grade, without substantially diminishing that care or it’s citizen’s livelihood.
    The 90 year experiment in socialism, repeated over and over, always ends up in failure, causing poverty and decline wherever it’s tried, often at the point of a gun. There are no long term socialist success stories. Only horror stories. It’s no coincidence that the great murdering dictators of the last century were all socialist/marxists: Mao, Stalin. Hitler, and Pol Pot, not to mention Castro, Chavez and Dinnerjacket.

    The question is why do all you socialists out there keep demanding a system that causes such pain?

  18. Another issue is the quality of dying.

    A neighbour once told me after a decade he still could not drive by UBC hospital without feeling completely traumatized. (UBC hospital is a teaching hospital on the University of British Columbia hospital.) The reason is his mother had been on life-support for six months before dying.

    He considered the medical intervention (the life support) had caused immense suffering and loss of human dignity at the end of life.

  19. Paul: “The proposed public option morphing into single payer is a coercive system. To work the way socialists want it to , the system must by it’s very nature take away people’s rights. It must decide who dies and who lives and to what extent those who live receive medical care.”

    Well, this is one decision where I trust the gov’t more than the private insurance company. The private company is motivated to save a buck; the gov’t may want to save money, too, but it also also has my welfare in mind.

    As far as socialism goes, insurance is a peculiarly socialistic enterprise. Insurers do not risk their own money as much as pool money from their customers to mitigate individual risk. Unlike, say, running a car company, the gov’t does rather well at pooling citizens’ money for common purposes. There is no particular reason to think that private insurers can do better, and, in the case of health care, the evidence suggests that they do not do better.

    Paul: “The question is why do all you socialists out there keep demanding a system that causes such pain?”

    You do not have to be a socialist to see that the current system causes a lot of pain.

  20. I live in Canada. We have a liberal democracy. We also have universal health care.

    To equate universal healthcare with totalitarian government is unsupported by the evidence.

    Universal health care exists is probably every modern liberal democracy but the United States.

  21. This always surprises me. Doing research in healthcare one has to know that there are people out there who would say ‘any life is sacred and worth saving no matter what’. So why bother with assigning monetary values that will creat moral outrage with 100% certainty and distract attention from the problem of scarcity of resources. Why don’t health care researchers come up with some universal measure _in terms of other typical lives lost_. So instead of writing “extending life by 2 months of an 80 year old terminal cancer patient costs $100k” they would write “extending life by 2 months of an 80 year old terminal cancer patient costs XX lives of a typical YY year old with ZZ condition”

  22. At least in theory, the use of quality adjusted life years (QALYs) in health care cost-effectiveness analyses can accomplish this. You can translate 2 months of life for an 80 year old terminal cancer patient into XX lives of a typical YY year old with ZZ condition using QALYs as an intermediate “common currency.”

    I’ve never seen anybody do this, however, nor heard anybody else suggest it. One reason may be that it isn’t clear what XX, YY, and ZZ would be a reference point that everybody can relate to and grasp. Perhaps that is why QALYs, for all the difficulties entailed in arriving at them, have persisted so long as the utility measure in these analyses: everyone understands the concept quickly.

  23. Ok let’s move on from valuing the life of an ill 80 year vis-a-vis a healthy 20 year old. At least the 80 year old most likely contributed health care taxes when younger.
    Reading some of the posts here, I’d hate to be a very sick or disabled 20 year old… someone severely injured in the military or an auto accident or with a birth defect, someone whose economic utility is minimal… what would you do with them??? Would you put them at the bottom any list hoping to avoid decades of expensive care?

  24. Just because we can extend life doesn’t mean we always should. The better we are at medical intervention the more responsibility is required of us. We have abdicated this responsibility by insisting that no expense be spared. But who pays and how much? Honestly, we have to answer this question and we refuse.

    I saw a bill a couple months ago for 8 hours in the ER – $250,000.

    My mother chose to discontinue medical treatment rather than be kept completely dependent for another 3-6 months. She knew what it was costing. And even with medicare and private insurance it was costing her personally upwards of $20,000 per month, plus maintaining her home. Not a problem if you are broke – the taxpayers pony up the money. Buy my mom wanted to leave something to her kids. And she did. But the first person she told was her lawyer – because she didn’t want her decision to be a fight.

    I have a lot of respect for her decision. I am angry in this country it has to come to that but that’s another topic.

  25. …they both deal with the issue of death after the fact.

    Bingo. We don’t know how much time $100K of cancer therapy might buy, but we’re dealing with a live person who perhaps has a family and MIGHT live 10 or 20 years more.

  26. Of course medical care must be rationed. The question is by whom. Let the government ration the medical care it provides. Let the government pay a fair price for the medical care it pays for. As long as I can afford it, I want to make my own choices about what medical care I purchase and I do not want the price inflated through cost shifting driven by government programs. What I spend on health care is nobody’s business but my own. The last thing I want is to pay twice for medical care – once for some government program that funds rationed inferior care for everyone and a second time for an insurance policy to cover the quality care that I choose to pay for outside the government managed system.

    This is the real issue here. Will the people be forced to fund a generous health care program for all because private insurance will be made unaffordable for everyone except the Obamas of the world? Or will people be able to opt out of the public plan with some kind of voucher that they can supplement to pay for private insurance.

    This is an issue today for people under Medicare and while there is little rationing of care going on (too little), the services that Medicare provides are negatively affected by low reimbursement rates and physicians are not allowed to accept supplemental payments from patients.

  27. Would love to know where you purchase your health insurance today. As someone who is self-insured (i.e. not through a large employer), I’ve found my options severely restricted because I do not come with a large group.

    Would also love to know the cost of your premiums each year. The total cost – not just the portion you pay via the deduction from your paycheck. Do you even know?

    And do you know how much your annual check-up costs over and above your co-pay? It costs a great deal more than $20 to visit the doctor, but many people actually are not aware of just how much more – the copay is what they know to be the cost.

    Are you aware that the large employers receive a tax benefit for their health insurance expenditures that totals in the trillions? Your health care is very much subsidized already by the US government.

    And as a member of the privately insured, you are already subsidizing the health care of the uninsured (we in the private market pay higher costs so hospitals can recoup the losses they have when they treat the indigent/uninsured in the ER.)

    Have you ever been denied insurance due to a pre-existing condition? Sadly, I know far too many people who’ve experienced this situation. Health care is rationed today – by the insurance industry. If you don’t believe me, check out their testimony before Congress last week, where they clearly and cogently defined how it’s done.

    The system we have is terribly broken and unsustainable.

  28. Really – what services did this patient receive in eight hours that could possibly cost $250,000?

    That translates into $31,250 per hour! That figure is absurd for eight hours of health care – and, IMHO, is the essence of the health care crisis in America – the fuzzy math behind the costs.

    (When my father was dying, we also made the decision to end treatment. It simply gets to a point where prolonging treatment is a torture for the patient, not just an expense to be billed. I’d love to know what percentage of elderly and terminal patients want treatment continued beyond what is medically appropriate.)

  29. Many young and middle aged people I know make strong statements that they would refuse living on life-support. Some even prefer a quick self-inflicted death to years of indignity.

    However, in the end, many end up receiving end-of-life treatment — against their will and at a substantial cost to the society. These patients include some of those who originally hoped (and planned) for a quick end.

    I propose two relatively simple policies:
    1. Require every person to make a living will.
    – this should be NOT an option but a requirement,
    – initiate this when people start a new medical plan,
    – then leave it alone,
    2. Change medical decision-making defaults towards removing (rather than maintaining) life support.

    #1 will work as a NUDGE. A 50-year old will sign a living will banning life support. And a (typical) 80-year old is not likely to go through an effort to overturn it.

    #2 will require some guidelines and psychological adaptation but it can be done. Especially, if hospitals are FINANCIALLY DE-MOTIVATED from providing end-of-life services.

  30. I think it’s more about risk tolerance and wisdom. The older we get there is a chemical the body produces that reduces our tolerance for risk. We are also wiser about the consequences of risky action

  31. Paul,

    You write: “Our government was formed to give every citizen life, liberty and the pursuit of happiness, not free or guaranteed medical care.”

    Can you explain here what you mean?

  32. Paul,

    You say, the American constitution guarantees the right to pursuit of happiness. Can you explain why the “right to pursuit of happiness” excludes a guarantee to health care?


    According to Statistics Canada, 91% of Canadians reported they were satisfied or very satisfied with life. Life satisfaction is strongly co-related to “self-reported health status.” Ie, there is a strong co-relation between happiness and health.


  33. Glad you mentioned wisdom, Ron. :) I expect that much of the wisdom of age has to do with the ability to assess risk.

  34. Tippy Golden: “Can you explain why the “right to pursuit of happiness” excludes a guarantee to health care?”

    Because with guaranteed health care, people might actually be happy, and so would not have to pursue happiness. ;)

  35. As part of my work, I have met with people who received extraordinary end of life treatment. In most cases, the patient died. Perhaps the saddest results where when family members would share their grief that they had been denied a few more comfortable/sane/loving moments with their spouse–time that could have been theirs but for the extraordinary, invasive, and painful treatment they received. They expressed the wish that their medical providers had been brutally honest with them about the potential trade-offs between the possibility of extended life, and the potential reduction in the quality of the remaining life. They would have opted for a shorter life with a more meaningful quality.

  36. Paul,

    Seriously. You state universal health care is prohibited under the Constitution. I’d like to hear the legal argument for this position.

  37. Until Paul returns to provide legal and other arguments, I will try to explain what I think he meant.

    1. For a health care program to be effective it must be comprehensive. Today, some healthy people try to get by without insurance. A single-payer system will eliminate this adverse selection and force healthy people to buy average-quality average-price insurance. Paul may find it unconstitutional.

    2. The current Medicare system compensates medical professionals at lower rate than private insurance does, and some physicians choose not to serve or restrict Medicare patients. If the entire field were compensated similarly to Medicare, some doctors could leave the field for other occupations or countries. Paul may find himself deprived of his right to choose (and pay for) the best care possible.

    In reality, single-payer systems exist in Canada and most of Western Europe, and people there do not seem deprived.

    Of course, Paul will dismiss these countries as “socialist”, a word he used six times in his earlier message.


  38. Thanks Victoria,

    In Canada we have universal health insurance. We don’t force people to buy health insurance. But people do have to pay taxes. Personal and corporate taxes fund the Canadian health care system. The real issue might be a moderate tax hike for Americans.

    Seriously. I’d like to hear the legal argument for prohibition of universal health care under the American constitution.

  39. In Canada, Paul wouldn’t lose his right to chose his physician. Furthermore, Canadian doctors would not take kindly to a suggestion they are second rate.

  40. About the constitutionality of universal health care:

    There are two relevant places in the constitution that address the somewhat broader issue of welfare:

    “The Constitution of the United States of America

    “We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.”

    One of the express purposes of the constitution is to promote the general welfare.

    “Article 1. . . .

    “Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States;”

    It seems that there has been controversy over the meaning of providing for the general welfare from the start. Finally in the 1930 the Supreme Court ruled that social security was constitutional, even though it provides for the welfare of individuals. I suspect that Paul disagrees with the individualistic interpretation of that clause.


    Moi, I think that society as a whole benefits from a healthy populace, and so would see no constitutional bar, even if I agreed that general welfare does not mean the welfare of individuals.

  41. There are a lot of quality comments here. My view is the choice of how much to spend to extend one’s life should be left to the owner of that life — and should be paid in no significant part by his/her earnings and savings.

    Healthcare’s biggest problem, IMO, is the third party payer system. Even for routine care, the insurance company pays for the majority of the cost. Why does this even make sense? Why aren’t we debating, for example, how much food we should feed to a person? Because everyone pays for their own food and can eat as much as they want AND as much as they can afford. Wouldn’t it be stupid if I paid only $10 any time I went to the local grocery store regardless of what I bought? And then the grocery store and my “food insurance” company fight over the actual price of what I purchased.

    BTW, don’t get me wrong, I am not saying the poor should be screwed. I think a real “insurance” plan that covers possibly everyone in case of a costly injury or illness is absolutely necessary. I don’t even mind if the government provides this — just add to the taxes.

    This will sound funny, but I think the problem with healthcare today is it is not expensive enough — not for the people who use the service.

  42. Ah correction – I meant to say “in no INsignificant part…” in the first paragraph. That’s why you should not use double negatives :)

  43. ………………………………………….
    Some news from Britains’ NHS… I know that Melissa came to Boston for treatments in Feb. i guess many posting here would discourage this kind of charity… perhaps they think it should be made illegal when the US has a public plan………………………………….. Here’s the news story…………………………..

    Melissa’s dad asks: ‘could treatment have been carried out free on the NHS?
    Jan 14 2009 Surrey Herald

    NHS red-tape scuppered Melissa’s chances of getting her £160,000 transatlantic proton treatment for free, says her dad, Mark.

    As funds continued to pour into her fighting fund this week, Mark said there was a chance Melissa could have been referred to Boston, America, for free by the Leeds-based National Commissioning Group Proton Reference Panel. It was set-up last year for sufferers just like Melissa and has so far granted 18 out of 25 applicants free treatment.

    But Melissa only became aware of the panel after she had been referred to Boston as a private patient by her Charing Cross Hospital surgeon in November.

    The policy of the panel is it will only consider patients for referral if it is approached first.

    As a result, Mark believes there is an ‘information lottery’ in the NHS, where access to treatment is dependent on who patients know, not on their clinical need.

    Although at pains to lay no blame on NHS doctors, whom he praised for their ‘fantastic’ care, Mark questioned the present policy.

    He said: “The reference panel seems to be set up in a way that makes it difficult to obtain a referral. Not all doctors know about it and by the time we found out, it was too late.

    “It’s playing with peoples’ lives and it’s wrong. I sent numerous emails to ask what was going on and didn’t hear back and if we hadn’t have taken matters into our own hands I really dread to think what would have happened.

    “We could wait no longer and I don’t like to say it, but if we had have done, she might have died.”

    Melissa’s fiancé, James Pegram, added: “NHS matters like these are very slow and it can be difficult to find out what’s going on. The system of referral should be more transparent.”

    * Generous donors continued to swell the fund this week. Staines firefighters started a month-long moustache growing competition after meeting Melissa at a sponsored run for her last month

    Firefighter Jason O’Herlihy said: “She’s such a nice girl and her story touched us all. She’s so young – it just brings it all home and we wanted to do something that could help.

    “There’s been a lot of chat here about who will grow the best and worst moustaches. I will probably get the worst because mine just grows in patches.”

    On Friday, kids from St Ignatius dressed in pink, lifting the amount of cash raised by the school to an impressive £27,000.

    And the following day, 120 people braved sub-zero temperatures to trek 10 kilometres around Bedfont Lake for the fund.

    Keep up to date with the news. Sign up for News Alerts

  44. While we are (still?) on the subject of the health care costs, here is what I propose.

    1. Establish in the U.S. a public health insurer who will accept everybody and provide U.S.-based services (hospitals, physicians, tests, imaging, etc.).

    2. Allow private insurers to develop business models at least partially relying on medical services outside the U.S. (expansion and codification of the current medical tourism).

    The model for this approach is the U.S. employment marketplace where companies hire citizens and (legal) non-citizens alike, move some of their production to foreign countries and outsource. The Federal employment, on the other hand, is limited to U.S. citizens (which is apart from any need for security clearances).

    The benefits of this approach are as follows:
    – Overall lower insurance costs from private and public insurers alike.
    – Globalization (“flat world”) of medical care.
    – Leveling of the playing field of the physicians’ compensation; bringing in the “invisible hand” into a current monopoly.


  45. I did a quick search on the internet and from what I gather:

    Melissa is a British school teacher in her 20s. Having survived cancer four years ago, she was then diagnosed with terminal brain and spinal cancer. She was denied an innovative treatment (proton therapy) by the NHS. Her family went public and fund raised to pay for the treatment in Boston. The cost $325,000 USD.

    If she was American she too would have been denied proton therapy unless (1) her insurance covered the $325,000 cost, or (2) it was paid for by donations.

    The stories don’t indicate her prognosis following the proton treatment. But the prognosis is not the issue. From a human perspective money should not be a barrier to credible medical care.

    Is a life worth $325,000? Absolutely.

  46. Michael Sandel (over at the BBC Reith lectures)would state the problem of health reform in this way:

    “For three decades, the governing philosophy of the United States and Britain was defined by the faith that markets are the primary instrument for achieving the public good. The financial crisis has put this faith in question. The era of market triumphalism has come to an end. But we have yet to find our way to a new governing philosophy. Even President Obama has yet to articulate one.

    “One obstacle to a new public philosophy is a persisting assumption from the age of market faith. It’s what I’d like to call — market mimicking governance. — It’s the idea that the primary purpose of government is to correct what economists call ‘market failure’.

    “As a governing philosophy, however, the task of correcting market failures is too humble and too narrow. Democratic governance is radically devalued if reduced to the role of handmaiden to the market economy. Democracy is about more than fixing and tweaking and nudging incentives to make markets work better.

    See: A New Politics of the Common Good

  47. The question, really, isn’t if a life is worth $325k. The question, from a funding standpoint, is how many of these patients needing extraordinary treatments are there? Are there so many that we’ve crashed the system? I doubt it. I believe we need to figure out how to affordably provide health care to the healthy and the various health issues healthy people encounter in their lifetime – and then figure out how to pay for the patients at the extreme end of illness.

    However, I would love to know, Tippy, if Melissa would have had this experimental treatment covered in Canada.

    Regardless, in both England (single payer, government health care) and the US (private health care program), she needed to pay cash for the experimental treatment.

    And frankly, Tippy, the outcome/prognosis is absolutely an issue. I think that viable treatments are always worth the money.

    But I absolutely do not want to open the door to funding virtually anyone who promises the possibility of a potential cure – if the patient hands over lots of dough. We all know too well how the profit motive persuades people to promise all sorts of things that have no chance of ever happening.

  48. Thanks Anne,

    In Canada, by law, reasonable health care cannot be denied based on income. (In other words, it was an attempt to enshrine, in statute, that access to medical care is not class-based.)

    I have heard of public “fights” in Canada over patients being denied access to innovative drugs and procedures that can be very costly. But not specifically on “proton therapy.”

    Here is a story that speaks truly about the best of universal health care in Canada. Further down the page, the writer talks about the care his ten year old sister received after she was diagnosed with brain cancer.

  49. In Canada, there is a proton therapy center near/in Vancouver. However, I believe it does only cancers of the eye…. which is how this therapy was started.
    Another interesting point on these very expensive therapies is how rapidly the cost of the equipment is about to drop. The current cost is roughly an unbelievable $150M-$200M for a proton treatment center. At that cost, the NHS says that they can’t afford more than center one in the UK…. However, machine is now being tested at MIT that is estimated to cost $30M for a single treatment room; and some startups are designing machines that they say will cost even less. SO…….. how does the healthcare system (like NIH) do the expensive heavy lifting (done in the US at MGH in Ma and Loma Linda in Ca) to get the knowledge that leads to the engineering breakthroughs………
    I do think the US needs universal coverage; my State (Mass) has started along that road and requires all residents to have health insurance. Although there are big problems still with the Mass system, many big problems have been overcome; and about >70% of the residents approve of the Mass system. It still isn’t cutting costs though.

  50. Interesting, checked it out on the web.

    Looks like proton therapy is a medical innovation that started at TRIUMF the sub-particle nuclear physics research institute at the University of British Columbia.

    So it means proton therapy (but only for eye cancer) is covered by the health premiums we pay. ($108 per month for a family of three or more in British Columbia)

    So Americans can’t claim they have the lock on medical innovation. (But maybe a lock on pricing.)

  51. From Wikipedia………. Early history of proton therapy…………
    The first suggestion that energetic protons could be an effective treatment method was made by Robert R. Wilson[11] in a paper published in 1946 while he was involved in the design of the Harvard Cyclotron Laboratory (HCL). The first treatments were performed at particle accelerators built for physics research, notably Berkeley Radiation Laboratory in 1954 and at Uppsala in Sweden in 1957. In 1961, a collaboration began between HCL and the Massachusetts General Hospital (MGH) to pursue proton therapy. Over the next 41 years, this program refined and expanded these techniques while treating 9,116 patients[12] before the Cyclotron was shut down in 2002. Following this pioneering work, the first hospital based proton treatment center of the world was built in 1990 at the Loma Linda University Medical Center in Loma Linda, California (LLUMC) (recently renamed the James M. Slater Proton Therapy Center), where more than 13000 patients with 50 different types of tumor have been treated so far (end of 2008)[12]. This was followed by The Northeast Proton Therapy Center at Massachusetts General Hospital (recently renamed the Francis H. Burr Proton Therapy Center), to which the HCL treatment program was transferred during 2001 and 2002.

    The first proton therapy center in Western Europe has been in operation at the Paul Scherrer Institute (PSI) in Villigen, Switzerland, since 1984.

    From TRIUMF
    The Mr. & Mrs. P.A. Woodward’s Foundation provided funds to construct the patient treatment chair and the proton beam line equipment.
    Until now, Canadian patients had to go abroad to receive proton treatment. Now they can receive it here in Canada, and at a much lower cost

    On 21 August 1995, Mr. Lorne Scott of Campbell River, BC, became the first person to have his cancer treated in Canada with a proton beam. The cancer treatment centre at TRIUMF results from a collaboration between the BC Cancer Agency, UBC’s Eye Care Centre and TRIUMF.

  52. Tucker, your comment recalled my visit to the vet with my 15 year old dog who was barely able to walk. The vet put Anson on the table and injected him with I don’t know what. As I gently stroked Anson, he became drowsy and with five minutes his heart had stopped.

    The doc said to me “it’s much easier for them than it is for us.” Exactly so, and at that moment I decided I am going to do all in my power to be sure that I can go as near to the way Anson did as possible.

    I’m almost 60 and have had a very healthy and happy life. I feel it would be selfish in the extreme for me to demand life-saving treatment at public expense costing hundreds of thousands of dollars at my age. And, with each additional year I live, it will become even more indefensible. I would not want to spend my own money on it, let alone that of my fellow citizens. Instead let the money be spent helping someone like the young mother mentioned by Anne above to be with her children for a few years more.

    In the meantime, I live each day with the kind of appreciation it would deserve if it were my last, because it might be. Nobody’s life has infinite value including mine and our country, rich as it is, doesn’t have infinite funds.

    Native-Americans had the practice of the old falling behind when they could not keep up any longer. This is the best I can do to follow in that tradition. Perhaps I can get a medi-bracelet that simply says “Let it be” but would my wish be obeyed?

  53. Clayton Christensen of Harvard studies how disruptive innovation in various industries changes the game — bringing better solutions, at lower cost, to the end user. (In healthcare, for example, open-heart surgery was disrupted by angioplasty, which was later disrupted by statin drugs.) In “The Innovator’s Prescription: A Disruptive Solution for Health Care” (2009), he and his co-authors apply this idea to the whole healthcare establishment.

    They note that “The dominant form of assistance today is fee-for-service (FFS), which gives providers a clear path to revenue: the more services you render, the more you get paid. … Studies concluding that up to half of all medical services performed in the United States are medically unnecessary pin much of the blame on the financial incentives embedded in fee-for-service” (page 227). We need models that pay providers for keeping people well, rather than when they get sick. Such models are working today at Kaiser Permanente, the Mayo Clinic, and similar institutions.

    An example of the difference disruptive innovation could make: Each year, Christensen and a colleague demonstrate, to the satisfaction of medical-school deans, that — using principles developed at Toyota — they could turn out better doctors in three years than they now turn out in four (pages 345-347). This would help all graduates, especially those who want to go into family practice.

    Despite the obstacles, new business models are already disrupting established providers and reimbursement systems. The book recommends specific regulatory changes to help the benefits reach patients years sooner.

    The proposals in Congress that I’ve heard about don’t correct the perverse incentives of the fee-for-service regime. Christensen offers a way to use market forces and smart regulation to permanently lower the cost curve, while enhancing quality and access — with little or no need for government assistance.

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