Pachydermophobia

And prate about an Elephant
Not one of them has seen!
-Saxe


It’s hard to escape the healthcare debate these days, if the term debate is at all relevant to a fractious circus that makes the three (or six) blind men veritable experts in their albeit respective fields. But what are we really talking about, when we are talking about “healthcare” - is it the amount of money we spend, the amount of care we receive, or something else entirely? And what are the consequences of thinking in terms of expense, versus outcomes?

Like Christopher Caldwell, Peter Singer is one of those people I enjoy reading, not so much because I enjoy vehemently disagreeing with them, but because it requires a bit more thought to figure out why this is so. A great example of this came about a few weeks ago, on the occasion of Singer’s unnecessarily long article in the New York Times Magazine, Why We Must Ration Healthcare, which reads something like The Book of Questions: Healthcare Edition.

Singer's bedrock assumption is that healthcare is a scarce good. Why? Well, simply because it is quite expensive, and getting more expensive all the time. QED and so far so good. Therefore, what is scarce must require allocation, and allocation, within the context of a single-payer system, is really called rationing, since there is only one entity doing the allocating.

This is good news for Singer, as rationing is the irresistible siren song of all utilitarians. Our author makes the short, happy leap from the idea of rationing, over the Chasm of Assumption, to the proposition that outcomes must always be determined prior to the actions that are taken, otherwise how could one ever hope to ration fairly? This approach, while elegantly, aspirationally algorithmic, may garner cheers from the actuarial departments of insurance companies, closeted central planners and econometricians in general, but nevertheless assumes the fundamentally closed nature of the system under inspection.

Can we really view healthcare, which gobbles up 16% of the GDP of the world’s richest nation, as a closed system? More importantly, is rationing the only way to make the system more efficient?

This, of course, is the more fundamental flaw in Singer’s argument. As a trivial metaphor, consider the plight of a woman who visits a well every day to pull water for her family. Unfortunately, her container has holes in it, so by the time she returns, only half the water remains from when she set out. Moreover, as time goes by, more holes develop in the container, until it’s positively a sieve. Is the answer to this dilemma a smug philosopher, waiting at the end of the line, with a prescription for rationing? Or would you prefer someone with a little duct tape?

Singer never entertains the possibility that the delivery of healthcare itself may be inefficient (nor do some of his admirers). He does not seem concerned that there are actors within the system, and those actors are incentivized to act (or not act) depending on the structures imposed on them beyond the suggested realities of health and illness. For such a nuanced analysis, we have to turn to Atul Gawande’s brilliant and hopefully influential New Yorker article, The Cost Conundrum.

Perhaps, since Gawande is a doctor, and a thoughtful one at that, he is concerned about using outcomes to determine the choices myriad officials and practitioners make in order to not only deliver care, but to make profit, avoid lawsuits, and all of the other activities that may seem ancillary to the act of ministering to the sick but in fact may well drive it.

I am happy to add that the Economist, in its typically trenchant fashion, recently aligned itself with an outcomes-based approach. Much like Gawande, it is perplexed by the huge variance in expense and outomes, not just between the United States and other countries, but also within the US itself.

For instance, the OECD countries have an average of 11 magnetic-resonance imaging machines per 1m people. America has 25.9. America uses them more often, too: 91.2 times per 1,000 people per year, compared with the OECD average of 39.1.

Some would argue that such a surfeit of procedures arises from physicians' need to protect themselves from lawsuits, but Gawande counters that, at least in his case study of McAllen, Texas, the state of Texas "passed a tough malpractice law that capped pain-and-suffering awards at two hundred and fifty thousand dollars. Didn’t lawsuits go down? Practically to zero.”

Furthermore, those who are only casual observers of the Economist might be surprised to to realize that its stance is agnostic when it comes to single-payer vs a more heterogenous platform:

If American reformers doubt the power of incentives, they should visit Sweden. Like other relatively cheap OECD systems, Sweden’s single-payer model has been plagued by long waiting-lists—a sign, to American conservatives, of the rationing that goes with socialised medicine. Swedish health officials tried and failed to cut queues by increasing direct funding for hospitals and even issued an edict requiring hospitals to cut queues for elective operations to three months. Then, last year, the health ministry said it would create a fund into which it would pay SKr1 billion ($128m) a year for local authorities that managed to reduce waiting times to that threshold. Nine months ago virtually none of the counties passed, but this month the health minister revealed that nearly all had cut their queues to three months or less.

An easy retort is, Well, fine, but doesn't that mean that the hospitals cut queues by cutting corners on service? However, that would not be a rationing argument, rather an outcomes-based argument. This situation is especially ironic, since a failed outcomes-based metric could in fact exist independently of a successful rationing metric.

That is, the debate’s essence is really about creating the proper incentives. This may sound naïve, but consider the surprising implication: a true revolution is perhaps not really necessary at all. This, of course, will be a source of much chagrin to demagogues on all sides.

That is not to say that the utilitarian approach will not need to be called upon at some point. For example, there are aspects of healthcare that are truly resource constrained; consider organ donation. In an earlier New Yorker article, Larissa MacFarquhar considers how the medical establishment determined who would have access to life-extending equipment:

The debate over fairness in organ allocation is haunted by kidney history. When the artificial kidney – the ancestor of the dialysis machine – first became able to sustain kidney patients for more than a few weeks, in the early nineteen-sixties, Seattle’s Artifical Kidney Center, which owned the equipment, formed a committee to decide which of thousands of dying kidney patients would get to use it and live. The committee, which included a minister, a housewife, a banker, and a labor leader, determined the worthiness of the applicants by considering, among other factors, their church attendance, their marital status, and their net worth.

The bulk of MacFarquhar's article, however, deals with the rise of Matching Donors, a website that leverages the brokering capabilities of the Internet to leapfrog over exactly the kind of scarcity impose by waiting lists. It is a disruptive technology that actually has created more supply than previously existed, something quite astonishing considering the subject matter. It has also raised fascinating and urgent questions about who deserves what when, and may well be hastening the creation of an open market for organs, much like there is one today for hair, plasma, semen and surrogate motherhood. In fact, the rise of sites like Matching Donors threatens even the very possibility of rationing.

Now, isn’t this the kind of Gordian knot truly deserving of Peter Singer’s utilitarian scalpel?