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Monday, July 30, 2007
Health Care's False Choices
Merrill Goozner, a health economist/journalist, gets deep responding to an article on the unevenness of cancer treatment. A few of his thoughts on one cancer drug:
Let's do a cost-benefit analysis of this drug. If we look at all patients taking this drug as a group, we find that their life expectancy has been extended by three months on average. Given that the average person in the group will be taking the drug for over two years, that amounts to nearly a quarter million dollars in extra medical expenses per patient. That means patients' insurers are paying $1 million per additional year of life.
You'd think for that kind of money you'd be cured. But that's almost never how it works. Despite the cost, Goozner doesn't necessarily believe that it's not worth covering this kind of expense.
Which brings me to my real bottom line when it comes to the new, targeted therapeutics for cancer. Isn't the real issue that $10,000 per month pricetag? Isn't what we really need is a better way to develop drugs so that they are affordable?
Too often this question is framed as a false choice: either we pay for the treatments, or we let people die before they have to. Pretty stark- but what if what's truly at issue is that the price of the treatment is inefficient? $1 million for an extra year of life, as callous as it may sound, is just too much. The benefit isn't worth the cost.
But that doesn't mean that people shouldn't get treatment- it means the health care market fails to price treatments properly. Government intervention could plausibly ensure that treatments are more accurately priced. That way, people could still get the treatment they wanted, only it'd be for a price that reasonably reflected the value of what's being bought. Say good-bye to your long-term fiscal imbalance, then, too.
It all makes sense to me. It's just too bad that nobody trusts government to do something like this, even though every other industrialized nation has managed to make government do this job pretty darn well.
Posted by Matt Lewis
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