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.

[Cross-posted at The Incidental Economist]