The Unavoidable Realities of Health Care

Sarah Palin got a lot of attention when she claimed that the Affordable Care Act would result in “death panels.” Like many partisan issues, liberals immediately defended the ACA, while conservatives flocked to Ms. Palin’s side. As in many cases, both sides missed the mark—and an opportunity for having a productive discussion. “Death panels” have recently been resurrected from the political grave now that Republicans are beginning the ACA rollback. We shouldn’t miss the opportunity this time to discuss the realities of the health-care system.

Ms. Palin was right, in a sense, when she said that the ACA would set up “death panels.” She was right in that there would be a government mechanism—perhaps a panel, perhaps regulations, which would ration health care and would inevitably end in people living or dying. She was wrong to insinuate that this didn’t already exist in some form and that there was some way to organize health care so that rationing care wouldn’t exist.

All health-care systems ration care in one way or another. They must. No system can afford to pay for all treatments for all people. It’s simply not possible. So there has to be a mechanism for deciding who gets what—which patients will receive which treatments. This is an uncomfortable reality for most people, but it’s a reality nonetheless.

We already do this with organ transplantation. There are medical criteria for being placed on an organ transplant list and certain criteria which can prioritize one case over another. This is because there are more people who need transplants than organs available to transplant.

We do this at the insurer level with specific medications or treatments. In 2014 Gilead Sciences released Sofosbuvir, a breakthrough medication which effectively cured Hepatitis C (HCV) faster and with fewer side effects than any other therapy. The aggregate cost of a Sofosbuvir treatment, however, often exceeds $100,000[1]. Due to the high price point, insurance providers and public health-care systems (Medicare, Medicare, and the VA) are reluctant to pay for it if there’s any other option. Due to this, Sofosbuvir was placed in a special category of medications which required “Prior Authorization,” meaning that before this medication could be prescribed, it needed to be approved by the insurer.

Three of the largest healthcare providers—Humana, Anthem, and Aetna–all have published requirements that state that patients must be in an advanced state of liver disease before treatment with Sofosbuvir can be approved. Advocate groups say that requirements which do not to allow patients to receive the newest, best treatment available (there are other treatments available for HCV) are cruel. Insurers say that they are trying to prioritize their spending on the most critical patients. Both of these are legitimate concerns.

The question we should ask as a country is not: “Should care should be rationed?”; because care has to be rationed in one way or another. Rather, the questions we should ask are: “Who should be making these decisions?”—and—“By what criteria should they be made?” In a single-payer health system, the government does the rationing. Government boards, panels, and regulatory bodies decide which patients will receive priority spending. In a pure free-market system, the rationing is done by the market, based on whether someone can afford the care they need or want.

Currently, in the United States, we have evolved a complex economic and financial apparatus to handle this fundamental problem of health care. This system, which certainly has downsides, does have its benefits, mainly that (a) no individual is forced to solely bear the cost of their care; and (b) no single organization has total control over the market. It’s an interaction between insurance companies, government agencies, hospital systems, and vendors (such as pharmaceutical companies).

This discussion, however, makes many people uncomfortable, because the idea of telling someone who is sick, “No, you can’t have that care,” is distasteful and uncomfortable, as it should be, to an extent. The priorities the society and the individual are often not the same. As an individual, my life has infinite worth, and I would be willing to spend any amount of resources to preserve or extend it. To society, however, my life has finite worth, and society is not willing to spend unlimited resources on my health care.

This friction between society and the individual is at the heart of our society and is nowhere better embodied than in the health care debate. An ideal policy should balance the interests of the individual and the collective, with clear boundaries to which everyone understands and agrees. The only way we can reach that balance is a frank and honest discussion of the realities involved. Using emotionally charged terms like “death panels” doesn’t help, but neither does pretending that any one policy is a panacea which will provide all things to all people.

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[1] Gilead priced Sovaldi at $1000 per 400 mg pill, which as part of a 12-week treatment course costs $84,000 and as part of a 24 week, treatment course costs $186,000. Sovaldi is most commonly prescribed as part of a treatment plan including other drugs such as Peginterferon-alfa, or Simeprevir (Olysio) which cost, $9,250, and $66,360 per treatment course respectively. When the price of Sovaldi is considered alongside the costs of medicines it is prescribed with, the aggregate treatment cost will often exceed $100,000 per patient.

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