• One man’s waste is another man’s life

    Megan McArdle posts on Zelboraf, a drug used to treat metastatic melanoma. It turns out that the drug likely prolongs life somewhat, but then leads to resistant cancer which can’t be treated at all. You get a few months, but no chance of a cure. this brings up the difficult question, what to do?

    Megan then addresses the problem of cost-effectiveness:

    I think the central difference between me, and the people who think that IPAB’s reimbursement-rate powers will be a big help in controlling health care costs, is that the latter group tends to think that a lot of expensive health care problems are like back surgery–something that doesn’t do any good, but gets done anyway, because of desperate patients and arrogant/ignorant/greedy surgeons. I tend to think that more of the questions are like this one.  Is spending $50,000 to give a pancreatic cancer patient an extra 5-9 months of life a wasted expenditure, or a medical advance? On the one hand, 5-9 months isn’t very long.  On the other hand, for a typical pancreatic cancer patient, you’ve doubled their lifespan, which seems like  a very long time indeed.

    I’ve certainly written enough about wasteful care to place me in the “latter” group in Megan’s mind. I do believe that we could save a lot of money by refusing to pay for stuff that doesn’t work. (Austin posted a pretty long list of potential tests this morning). My issue with Megan’s thoughts here, though, is that she thinks we’re all on one side or the other. It’s not an either/or problem.

    I think the smart thing to do is start with the low hanging fruit. You can, with little effect on outcomes, start asking people to pay for things that don’t work (like back surgery) with their own money. Don’t refuse to let them get it. Just refuse to pay for it with other people’s tax dollars. That will save quite a bit.

    But Megan’s right that eventually, we will be left with the task of deciding what to do about things that do some good, but at a high cost. Those things are effective, but are they cost-effective? Are they worth your money? That’s a personal decision. Are they worth your getting society’s money? That’s a totally different decision, and one society needs to consider.

    Lest you think this is only a government issue, remember that every insurance company needs to make these choices, too. The only difference is that they likely won’t hold their discussions publicly.

    Why can’t we start with the easy stuff and then advance to the hard stuff? I advocate for attacking the arthroscopic knee surgeries first, but I’ve also done research on utility values, cost-effectiveness, and am continuing work on how we might consider the hard decisions in the future. Those discussions will be complicated, and we shouldn’t shy away from them. That doesn’t mean we can’t limit their need as much as possible.

    • Yeah, when I read that, it pissed me off too. How can he speak for all liberals? Most liberals I know during the health care fight wanted something like Medicare or the VA because it was more cost effective than the private sector. I have no idea what he’s trying to do here.

    • 1) This argument would make more sense if the right didn’t also oppose comparative effectiveness research. I understand Ms. McArdle doesn’t speak for the right, and that cost effectiveness is a slightly different issue, but I have trouble discussing cost-effectiveness with people who argue that we shouldn’t even KNOW the relative cost and effectiveness of drugs, much less act on that information.

      2) Her post reminds me a bit of those people who yell “Get government out of my Medicare!” The act of setting a reimbursement rate is an indirect cost-effectiveness decision that plays a huge role in determing how much of a certain procedure will be performed. Reimbursement rates are set, of course, ALL THE TIME by Congress. Under the ACA, the IPAB would instead set the rates when healthcare costs grow quickly AND Congress chooses not to do anything about it. Reimbursement rates are being set in both systems. It’s just a matter of who is setting them. So how does the IPAB relate to her overall point?

    • Dear Aaron —

      I don’t think you’ve quite captured Megan’s point, because the situation that she describes is in fact an ether/or situation, and you really do have to be on one side or the other.

      I think we all agree with Megan when she points out that there are some procedures (e.g. back surgery) for which we can make a strong evidence-based argument that the treatment confers NO benefit, and therefore it doesn’t make any sense to pay for it, but that many other procedures DO confer some evidence-based positive benefit, just one that might not justify its cost (e.g. Zelboraf). The crucial point here is that the first category is much much easier to eliminate from a real-world political point of view, while the second category is incredibly painful, and involves arbitrary value judgments– we just decide that an extra 6 months of life isn’t worth spending $60,000, but we could have decided otherwise if we wanted to. Any such (arbitrary) value judgment will trigger enormous resistance from those people who are denied treatment because of it.

      Where this becomes an either/or situation is when we get into a debate about the relative proportions of the two categories. Megan is arguing that the first category (e.g. back pain) is a very special and ideal class, and that it comprises only a small percentage of total medical costs, so that most of the cost savings of eliminating “unnecessary” treatments will be in the second, extremely politically controversial, gut-wrenchingly painful category. The alternative position is to claim that the politically easy decisions will in fact comprise a substantial portion of our health care costs. In that sense, there really is an either / or situation: you can’t simultaneously think that the easy cases represent a big portion of spending, and at the same time think that the easy cases represent a small portion of spending.