Green eggs and ham

The New York Times published a joke in December 1942 about a soldier writing home to his mother from camp. “The food in this camp is absolute poison. And such small portions.” The Dean of the Harvard Medical School, Jeffrey S. Flier, writes that the same thing is true about health care “reform”: it will take everything that is bad about the current US system and give patients more of it. In the process, it will also take everything that is good about the status quo and give people less of it in the future. The bad news is that certain food items in the camp will remain “absolute poison”; the good news is that  it will be available in really generous portions. Flier analyzes the current system’s problems:


Our health-care system suffers from problems of cost, access and quality, and needs major reform. Tax policy drives employment-based insurance; this begets overinsurance and drives costs upward while creating inequities for the unemployed and self-employed. A regulatory morass limits innovation. And deep flaws in Medicare and Medicaid drive spending without optimizing care. …

In discussions with dozens of health-care leaders and economists, I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health-care spending rather than restrain it. Likewise, nearly all agree that the legislation would do little or nothing to improve quality or change health-care’s dysfunctional delivery system. The system we have now promotes fragmented care and makes it more difficult than it should be to assess outcomes and patient satisfaction. The true costs of health care are disguised, competition based on price and quality are almost impossible, and patients lose their ability to be the ultimate judges of value.

The solution: provide more of the same defects. Flier asserts that the major problem with the current system is that many parts of it are excessively regulated and dominated by monopolies.  Other critics have also called it overlawyered. But for many advocates of “reform” the real problem is different: there aren’t enough regulations; not enough special interests, not enough lawyers for them.  The answer to the current difficulties is to increase the size of the portions. Dr. Flier says the result will be more expensive health care and fewer and less innovative therapies. Flier tells the public to rig for depth charges, and adds, “we should not be making public policy in such a crucial area by keeping the electorate ignorant of the actual road ahead.”  But of course we should, how would you otherwise get them to go down it?


Worse, currently proposed federal legislation would undermine any potential for real innovation in insurance and the provision of care. It would do so by overregulating the health-care system in the service of special interests such as insurance companies, hospitals, professional organizations and pharmaceutical companies, rather than the patients who should be our primary concern.

In effect, while the legislation would enhance access to insurance, the trade-off would be an accelerated crisis of health-care costs and perpetuation of the current dysfunctional system—now with many more participants. This will make an eventual solution even more difficult. Ultimately, our capacity to innovate and develop new therapies would suffer most of all. … We should not be making public policy in such a crucial area by keeping the electorate ignorant of the actual road ahead.

Keeping the electorate ignorant may after all be the point. Just as institutional food service is often run for the benefit of the cooks and not the diners, institutional health care may actually be intended to serve the System and not the patients. If the whole point of the exercise was to take money and choice away from one set of actors and transfer it to another, the “reform” effort could hardly be bettered.  Reform certainly gives the System more power. Britain’s NHS provides a preview.

The Daily Mail says the British government’s health rationing body, NICE, has decided that 18,000 pounds is too much to pay for extending a liver cancer patient’s life by six months.

Liver cancer sufferers are being condemned to an early death by being denied a new drug on the Health Service, campaigners warn. They criticised draft guidance that will effectively ban the drug sorafenib – which is routinely used in every other country where it is licensed.

Trials show the drug, which costs £36,000 a year, can increase survival by around six months for patients who have run out of options. The Government’s rationing body, the National Institute for Health and Clinical Excellence (Nice) said the overall cost was ‘simply too high’ to justify the ‘benefit to patients’.


But which costs? The Daily Telegraph says data submitted by NICE “shows that supplying the drug to the 600 to 700 people with advanced liver cancer would cost a total of £7.7m. … Nice has decided that the £7.7m would be better spent elsewhere in the NHS, that could be on other cancer treatments, or heart transplants, on intensive care facilties for premature babies, or hip replacements.” Anyone with a calculator can easily determine that the average cost of extending a British liver patient’s cancer patient’s life comes to something more than 130 pounds per day.  Not that cheap, but on the other hand less than many motels charge for a day’s lodging. The Daily Mail argues that the problem really isn’t cost — the real problem is the diffcult of setting up a new bureaucracy to meet the needs of the relatively small and politically underpowered constituency of terminal liver cancer patients.

The problem for campaigners is that liver cancer is not as high profile as breast cancer. This is partly down to the fact that fewer people get cancer of the liver than are diagnosed with breast cancer – around 3,000 a year compared with 45,000.

But that is not the whole story. Breast cancer has two charities fighting its corner – Breakthrough Breast Cancer and Breast Cancer Care – both of which attract millions of pounds in donations, and help boost the profile. Other cancers tend to fade into the background. There is, for example, still no prostate cancer screening programme that compares to the major screening programme for breast cancer.

And these practices may already be in America. The Washington Post describes what may be the first of many actions by a government appointed “task force”.


Women in their 40s should stop routinely having annual mammograms and older women should cut back to one scheduled exam every other year, an influential federal task force has concluded, challenging the use of one of the most common medical tests. In its first reevaluation of breast cancer screening since 2002, the independent government-appointed panel recommended the changes, citing evidence that the potential harm to women having annual exams beginning at age 40 outweighs the benefit.

Coming amid a highly charged national debate over health-care reform and simmering suspicions about the possibility of rationing medical services, the recommendations immediately became enveloped in controversy. …

the American Cancer Society, the American College of Radiology and other experts condemned the change, saying the benefits of routine mammography have been clearly demonstrated and play a key role in reducing the number of mastectomies and the death toll from one of the most common cancers.

“Tens of thousands of lives are being saved by mammography screening, and these idiots want to do away with it,” said Daniel B. Kopans, a radiology professor at Harvard Medical School. “It’s crazy — unethical, really.”

With politics in the picture it is not inconceivable that high profile or politically correct diseases will get more dollars; that some patients will be more equal than others. Dean Flier says that bureaucracy will inevitably set “targets” and “averages” and establish themselves to supervise it. The pixel pushers and lawyers would grow in number, almost outpacing the bacteria they are charged to combat. What would decline the most of all, according to Flier, was innovation, an area in which the Cato Institute says the US currently leads the world. “In three of the four general categories of innovation … — basic science, diagnostics, and therapeutics — the United States has contributed more than any other country, and in some cases, more than all other countries combined.”


But the best prism through which to view these developments isn’t ethics, as Dr. Kopans believes. It is our old friend the principal-agent problem. When the actual market for health care “reform” is understood, its outputs — less care, higher costs, more bureaucracy, less innovation — are readily understood.  Monopoly rents and government jobs are the natural outputs of a system whose main customers are lawyers, insurance companies, bureaucrats, doctors and only patients as an afterthrough. The patients will have the smallest market power. And after the “reform” is completed they may have little or none at all, which leaves the resources open for division among the remaining players. As long as the patient had some way of influencing the agent, like his doctor for example, the link between the sick person and the system was direct and responded somewhat to demand. In a completely bureaucratized system the patient’s interests will be represented only diffusely, through giant boards, task forces, insurance companies, lawyers and bodies like NICE. And in the nature of things his agents may begin to operate the system entirely for their own benefit. The patient will become the forgotten principal, a pathetic dying thing to be trotted out in the service of this or that agenda, but useless otherwise.

Once the relative market power of parties under the “reformed” system is understood, everything follows directly. As in every industry dominated by monopolies, innovation will shrivel. The medical equivalent of more chrome and styling will be trotted out each year over the same old chassis. Lawyers and special interests will gorge themselves at the trough. Bureaucracies will get bigger. Hospital wards may decline in size but forms will multiply like a contagion. Britain’s NHS boast that “only the Chinese People’s Liberation Army, the Wal-Mart supermarket chain and the Indian Railways directly employ more people” speaks volumes. But of the patient? Well if you’ve got terminal liver cancer in the UK, then a hundred and thirty odd pounds a day may be too much to keep you alive, not because the money isn’t available, but because it’s bureaucratically unobtainable. When you aim to be like the Chinese People’s Liberation Army, then some recruit is bound to write to mother and say, “the food in this camp is absolute poison. And such small portions.”


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