Bryan Caplan  

Medicare, Rationing, Food Stamps, and Cigarettes

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The Junker Problem... Law, Legislation, and Medicare...
Robin wasn't available for lunch today because he had a deadline.  If this is what he was working on, my loss was the world's gain.  From the NYT's Room for Debate:

The British control costs in part by having the will to empower a hard-nosed agency, the National Institute for Health and Clinical Experience (N.I.C.E.), to study treatments and declare some ineffective. Some hope the United States will create a similar agency, but I fear it would be hopelessly politicized and declawed.

My solution: admit we are cost-control wimps, and outsource our treatment evaluation to the U.K. Pass a simple law saying Medicare (and Medicaid) won't cover treatments considered but not positively appraised by the Britain's national health institute.

Even better, use clinical evidence evaluations of the British Medical Journal. They've classified more than 3,000 treatments as either unknown effectiveness (51 percent), beneficial (11 percent), likely to be beneficial (23 percent), trade-off between benefits and harms (7 percent), unlikely to be beneficial (5 percent) and likely to be ineffective or harmful (3 percent). Let's at least stop paying for these last two categories of treatments! And to put pressure on doctors to collect evidence, let's stop paying for "unknown effectiveness" treatments after 10 years of use.

Robin ably heads off the public choice objection.

Yes, eventually, this evaluation source would become corrupted, as were the asset risk rating agencies that contributed to the recent financial meltdown. But we'd at least have a few more years to come up with a better solution.

I suspect that many conservatives will call this "government rationing of health care."  I just don't get this.  Is it "government rationing of food" if you can't buy cigarettes with food stamps?


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COMMENTS (6 to date)
James Way writes:

It's interesting from a public choice perspective as to whether or not an agency gets captured. Living in the UK, as far I can tell it simply hasn't happened here with respect to NICE- can anyone confirm?

IIRC there was a paper on public choice in healthcare out a while ago, that found that whereas in Italy political connections affected the quality of public medical service, it didn't really happen in the UK. I think they put this down to the strong Civil Service. Maybe this is what keeps NICE in check. Could this be transplanted into the US? I doubt it.

Cahal writes:

The UK model is easy to make fun of, but I honestly think it's the best way to control healthcare costs. We pay much less than any other developed country, it's free for everyone and we still get consistent top 10 results.

Feel free to use it!

Rob B writes:

It's pretty close to government rationing if you are forced to purchase food stamps and participate in the program. And to push the metaphor - if the only available insurance is government regulated or provided, then it's getting even closer.

rpl writes:

Bryan,

That might (maybe) solve the problem of what to pay for and what not to pay for, but it offers no help at all on the question of how much to pay for the things we do decide to pay for out of the public purse. That's the really hard question in all of this.

Steven writes:

Is it "government rationing of food" if you can't buy cigarettes with food stamps?

When food stamps are the only allowed way to buy items like cigarettes, then yes.

Eric Morey writes:

"let's stop paying for "unknown effectiveness" treatments after 10 years of use."

Why 10 years? Why a strict cutoff versus a phase out? Should all treatments in this category be treated the same.

Good concept. Needs refining.

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