• Palin’s “death panels”

    About the president’s National Commission on Fiscal Responsibility and Reform Sarah Palin writes,

    It also implicitly endorses the use of “death panel”-like rationing by way of the new Independent Payments [sic] Advisory Board—making bureaucrats, not medical professionals, the ultimate arbiters of what types of treatment will (and especially will not) be reimbursed under Medicare.

    Sigh. I’ll restrain myself and simply ask, would Palin accept IPAB recommendations if they were endorsed by medical professionals? Let me also note that a low Medicare reimbursement for a proven less-effective treatment need not mean the inability to receive it. It just means that the patient has to pay a greater marginal cost. It’s a consumer-directed and value-based design.*

    About the Ryan Roadmap, she writes,

    On health care, it would replace ObamaCare with a new system in which people are given greater control over their own health-care spending. It achieves this partly through creating medical savings accounts and a new health-care tax credit—the only tax credit that would be left in a radically simplified new income tax system that people can opt into if they wish. [Emphasis mine.]

    This is not a terrible idea, and I have no doubt that more enrollment into consumer-directed (higher deductible) plans with medical savings accounts is in our future. So long as there are protections for low-income individuals and a movement toward value-based cost sharing, it’s worth a try.

    But recognize the disconnect between support of consumer-directed concepts in the Ryan Roadmap and rejection of what could be essentially the same thing under the IPAB. Either way, it’s about individuals paying more of their own way, and particularly for therapies with lower effectiveness. Why does Palin prefer taxpayers foot the bill for less effective care?

    If Palin is going to call spending more of one’s own money and less of someone else’s (taxpayers’) on health services “death panel-like rationing” then she has effectively rejected and endorsed doing so in the same column. That presupposes that “death panel-like rationing” has a precise definition and that Palin knows what it is. I wish she’d tell us and explain why the term doesn’t apply to what insurance companies do every day, what they’d do under Rep. Ryan’s plan.

    I have another theory that fits the facts. “Death panel-like rationing” actually doesn’t mean anything and doesn’t apply to anything that would ever happen in the U.S. It’s just another euphemistic bit of nonsense, full of fear and loathing, signifying nothing.

    *This would require a change in the balance-billing rules. Follow the links to learn more (post 0post 1, post 2, post 3).

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    • First, I am amazed that you are taking seriously anything written by Palin. She speaks only in sound bites and there is no coherent morality or philosophy behind her pronouncements (unless you count scoring political points a philosophy). I’m also surprised at the length of this “writing” since I thought she only communicated through twitter (140 characters).
      Anyway, by the end of your article, you seem to have reached the same conclusion that she is speaking nonsense and point out the obvious internal inconsistencies in her “arguments”.
      I’m also concerned about the implications of higher patient “responsibility” (why is is that poor people need to be responsible and rich people get subsidies and bail-outs). Higher patient payments have a few problems. Hospitals and doctors charge “private pay” patients 4x to 10x the rates that insurance companies and government programs pay. This cost-shifts to those least able to pay. These patients then tend to avoid even necessary care thus “self enrolling” in their own personal death panel. This is not a desirable outcome.

      • @Mark Spohr – There are ways of not taking someone seriously that are more polite than others. I went with a polite way. I hope the message, by the end, is clear. You seem to have gotten it.

        The real problem here is that the WSJ permits such nonsense on their pages.

    • I generally agree with what you’ve written here – certainly with the notion that “death panel” reflects a crass distortion of reality (incidentally, add “dysphemistic” to your lexicon specifically for situations like this ;-]).

      I do think there is a useful distinction to be drawn between the situation facing a patient paying “full price” (as out of an HSA) versus having the price to the patient strongly influenced by an outside entity’s determination of the service’s value. That said, the distinction isn’t cleanly captured by calling one “medicine by death panel”.

      • @Morgan – “dysphemistic” got it. Good one.

        Do those paying out of an HSA get the prices determined by their catastrophic insurer? I presume, “yes.” In that case, all prices are strongly influenced by an outside entity.

        Now, Medicare is different, I’ll grant. But is it different in ways that make it obvious that it is an affront to all that is good and holy to allow it to pay/price based on some objective, clinically-driven, basis of efficacy?

        The alternative is to run out of money.

        To preempt you or someone else, no the alternative on this margin is not to turn it over to a market/voucher system–though I’m not saying I object to that here. Such a system rations too. When exactly is rationing not OK? Only when the government is involved (or more involved) than it might otherwise be? Could someone pin it down?

    • @Austin Frakt:

      Your point about the catastrophic insurer negotiating prices and thereby strongly influencing the decision is well taken.

    • @Austin Frakt:

      “[is it an]…affront to all that is good and holy to allow [Medicare] to pay/price based on some objective, clinically-driven, basis of efficacy? ”

      I don’t think it is. In fact, I’d go a step further, and say that Medicare should explicitly make coverage and reimbursement decisions based on estimated *cost-effectiveness*. Someone has to decide if the treatment is worth the cost, and Medicare is paying the bills (well, technically taxpayers are paying, but I don’t see us voting on these decisions).

      Yes-no coverage decisions are clean and workable in the context of fixed guidelines for first, second, third (etc.) lines of treatment. Any scheme involving partial payment for “alternative” treatments not judged to be maximally cost effective gets very complicated, but maybe there is a way to do it.

    • @ Austin Frakt:

      Sorry for yet another comment, but you posed an interesting question. “When exactly is rationing not OK?”

      First, I assume we mean rationing in the sense “deciding whether something is worth paying for” (rather than the wartime version of “allowing the purchase of only so many units of something”). Then it seems to me the basis for rationing being OK is whether those criteria are perceived as “right”. That’s obviously value judgment territory. Some people will judge based on whether the outcomes seem equitable, others based on whether the outcome is efficient by some measure, others based on the extent to which the criteria conform to some a priori principles, and so on. So the answer is “it depends on who you’re talking to”.

      Best I can do for now.

      • @Morgan – I think you illustrate that it isn’t something one can easily answer. I think those who wish to use the term pejoratively or as a negative feature need to do the work to define exactly what rationing is and when it is not OK. My belief is they can’t do that without condemning quite a few things they actually hold dear. Rationing in fact is not a bad thing. We do it all the time, with everything. What is not rationed somehow?

    • Is consumer-driven health care “worth a try?” I wish you’d read Wennberg’s book or look at the Dartmouth Atlas Project. Health care that is really consumer-driven would be great. But sending people into the marketplace as individuals to negotiate with providers? Seriously? How are you supposed to know whether you need upper gastrointestinal endoscopy? Especially when all your friends with heartburn have had one.

      • @Sam Baker – The private sector wants lower premiums. Managed care was beaten back. What else would you have them try? I think CDHP is it. Such plans are already growing.

        That’s not the same thing as saying I think they’re the long-term solution. I predict a backlash against them too, and have said as much in prior posts and a Kaiser Health News column (you can look for them if you’re interested).

    • Comment to Mark Spohr:

      You write:

      “First, I am amazed that you are taking seriously anything written by Palin.”

      I infer that you are an economist, because you are making a tall assumption.

    • By the way, suppose a politician campaignedon the following platform:

      “I envision in health care in which, yes, health-care is being rationed, but mainly for the lower income classes whose members, according to what I learned in economic theory, do not contribute much to society anyways. And precisely because that is so, I want health care to be cheaper in absolute dollar terms for high income people than for low income people. It would be not only more efficient than the current system, but also more just,”

      Do you like that vision? Do you think it would sell in in a political forum in America? If not, but you do like the vision — perhaps because you are a high-income person — find another, mellower way to put this. It is this week’s homework assignment.