September 10, 2006
Response to Comment on Extending Life--Posner
Very fine comments; a few brief responses:
I apologize for having misnamed Cutler's coauthor as Allison Brown rather than Allison Rosen. However, I don't apologize for having described her as an M.D. That was not denigration! It is entirely appropriate that an article on the economics of health care should be written by an interdisciplinary team consisting of an economist and two M.D.s.
One commenter asked me whether I would have spent $300,000 on end of life medical care for my father. The answer is yes. But now ask me whether I would have spent that amount if it would have required me to take on heavy debt or give up my judgeship and got into private practice. The answer is that my father would not have wanted me to make that large a sacrifice merely to keep him alive for a few more months of a rather miserable existence because of his cascade of ailments and deficiencies.
If I had been paying, however, I would have been vigilant to make sure I wasn't overpaying and I would have avoided painful repetitive tests. That is the difference between a system in which people pay for medical and a system in which the government pays.
I do not favor coupling a reduction in Medicare benefits with imposing a ceiling on what rich people can spend out of their own wealth on medical care. There are three points. Because Medicare will not pay for highly experimental procedures and does not pay 100 percent of a person's medical bills, there is no doubt that rich people get on average better medical care than poor people. There really is no feasible way of equalizing medical expenditures across persons regardless of wealth. But second, the purpose of accumulating wealth is to be able to spend it; if you forbid people to spend it in their preferred ways, you are destroying wealth. Third, when scarce resources are not rationed by wealth, it doesn't mean that they are allocated more "fairly." Under any feasible system of nonprice rationing of medical care, one can be sure that big shots, people with connections, physicians' relatives, the big donors to hospitals, etc., will get the best care.
Posted by Richard Posner at 06:36 PM | Comments (1) | TrackBack (0)
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I would agree with your economic analysis if relevant licensing committees did not restrict the supply of doctors. But that supply is to some extent fixed, and therefore much medical spending amounts to a zero sum game. As I try to show in this article, extra spending by some on some forms of medical care can divert care away from low and middle class patients.
You say that "there really is no feasible way of equalizing medical expenditures across persons regardless of wealth." But there are many ways of taxing such tiering, as states are already starting to do. Oklahoma, for example, has a tax on specialty hospitals (which provide very high quality care but often do not take on the ER, charity care, and educational responsibilities of general hospitals). This tax goes toward care for the uninsured and poor.
I propose something similar in this post.
You say that "the purpose of accumulating wealth is to be able to spend it; if you forbid people to spend it in their preferred ways, you are destroying wealth." No, you may just be redirecting that spending toward more socially beneficial ends. Certainly a ban on 50-foot long cars would not "destroy wealth;" it would just divert spending on some Hummer limos to more manageable vehicles. One needn't be a paternalist to recognize that such a diversion may not just be better for society as a whole, but also for the spender.
You claim that "when scarce resources are not rationed by wealth, it doesn't mean that they are allocated more 'fairly'". That may be the case, but certainly egalitarians cannot be blamed for aiming to divert a few dollars (now going toward the most advanced medical care) toward basic medical care for all. Indeed, that seems to be a basic theme of Daniel Callahan's recent work (including Hazards of the Research Imperative)...and he has been appointed by an economically conservative President to address such matters.
Finally, I must admit that your book Catastrophe offers the most profound challenge to my point of view. For I must concede that it may well be spin-offs from the most advanced medical care that permit humankind to face down some of the most frightening possibilities you describe in that work.
Posted by Frank at September 11, 2006 01:58 PM | direct link
