Friday, May 09, 2008

What are We Really Paying for?

Once in a conversation with a co-worker, I mentioned that I eat pretty much the same thing breakfast every day. She recoiled in horror and said that she went to great lengths to vary her breakfast meals from day to day. The reason, she explained, is that her grandfather ate the same thing for breakfast every day. His doctor told the family that this led directly to his heart-related death at age 62.

When I asked what her grandfather’s breakfast fare consisted of, she said that the memory of it was still crystal clear in her mind, including the scent. He had three eggs fried over easy, half a pound of bacon fried, a large plate of hash browns fried in the bacon grease, and two chunks of bread slathered with real butter. She claimed he rarely missed a day of eating this same breakfast for over 35 years. Criminy, with a meal like that every day for decades, it’s amazing that her grandpa’s ticker worked as long as it did!

I thought that my co-worker was pulling my leg with her idea that routine was the governing factor in her grandpa’s demise, as opposed to the nutritional value of his food choices. Certainly, I conjectured, a person could enjoy great health by eating a healthy breakfast daily, even if the meal content never varied. But she completely rejected this line of thought. She was so serious about it that she had built rituals to support it.

I was stunned. How could a reasonably bright and intelligent person draw such a wrong-headed conclusion from the data available? I have since learned that this happens all of the time. In fact, we even have highly educated people that invest tremendous energy and resources in defending flawed conclusions.

For example, many smart people look at the skyrocketing cost of medical care and the increasing cost of medical insurance and conclude that the answer is yet more insurance. But perhaps we should conclude that we’re focusing on the wrong things.

GMU economist Robin Hanson wrote (here):
“Car inspections and repairs take a small fraction of our total spending on cars, gas, roads, and parking. But imagine that we were so terrified of accidents due to faulty cars that we spent most of our automotive budget having our cars inspected and adjusted every week by Ph.D. car experts. Obsessed by the fear of not finding a defect that might cause an accident, imagine we made sure inspections were heavily regulated and subsidized by government. To feed this obsession, imagine we skimped on spending to make safer roads, cars, and driving patterns, and our constant disassembling and reassembling of cars introduced nearly as many defects as it eliminated. This is something like our relation to medicine today.”
Now, it is true that we can’t trade in our bodies for newer ones, like we do our automobiles. Today’s cars are far less polluting and more efficient than the cars of 30, 40, or 50 years ago. But, despite science fiction, science and technology haven’t made human bodies any more efficient than were human bodies back then.

That does not mean we’re spending our health care money well. Hanson says that “health policy experts know that we see at best only weak aggregate relations between health and medicine, in contrast to apparently strong aggregate relations between health and many other factors, such as exercise, diet, sleep, smoking, pollution, climate, and social status.”

Hanson argues that we could cut medical spending in half without seeing a significant decline in actual health outcomes. We should, he says, be focusing our resources on those factors that have much greater impact on health.

There are significant barriers to this kind of transition. Hanson asserts that our society is heavily indoctrinated in the myth of the benefits of medicine. “Heroic medicine,” he writes, “is just too central to our culture ….” Despite these myths, he claims that objective studies show that medicine has only slight positive impacts on health. Many studies show neutral or negative effects.

Few in the medical industry would believe that the services and products they provide don’t make much of a difference. But our massive medical industrial complex with all of its fellow travelers that draw power and income from the system represent yet another major barrier to focusing on positive health.

Given what we know from a large variety of studies, Hanson postulates that an aggregate health spending reduction would “reduce helpful and harmful medicine in roughly equal amounts. The claim is not that there would be no harmful health effects of such a policy, but rather that harmful effects would be roughly balanced by helpful effects.”

If you read through Hanson’s post, you can draw the conclusion that a 50% (or 100% or 1,000%) increase in our medical spending will have no appreciable impact on our overall health. Hanson postulates that a 50% reduction in overall medical spending would have an aggregate neutral effect on health outcomes. Given that we continue to rush headlong toward increased medical spending, cutting health spending by 50% not reality, and Hanson knows it.

“Yes, I know, these are not politically realistic proposals. But at least health policy experts should publicly contradict those who overemphasize medicine, including politicians whose “health policy” is mainly medical policy, and newspapers whose “health” news is mainly medical news. Furthermore, health policy experts should not themselves mainly research and teach medicine.”
Hanson admits that categories such as “immunization, infant care, and emergency care” might warrant larger benefits.

Hanson’s suggestion that medicine harms as much as it helps once a certain threshold is reached caused one man observing his elderly father languishing in the hospital to call the treatment “Hansonian medicine.” I have seen this with my own father. Once the crisis was dealt with, much of the remaining treatment my father has received has caused at least as many problems as it has helped. His overall quality of life certainly isn’t any better for all of it. And piles of cash have been consumed.

If we were to insert more consumerism and free market principles into medicine, we would see a shift away from treatments that don’t really help toward prevention and treatments that do actually help. This would restore the “private clues about the health effectiveness” upon which we would base how we spend our health care dollars.

Maybe we can’t achieve a wholesale 50% cut in medical spending, but we can work to implement consumerism bit by bit. Over time this could naturally achieve Hanson’s desired 50% cut while actually improving real health.


Robin Hanson said...

Well written! :)

Frank Staheli said...

Good points!

About a year ago, I wrote something that has a somewhat similar take. It begins:

I don't know why they took so long to come up with the idea. Considering how effective most health insurance plans are, I knew it would be only a matter of time before they came up with health insurance plans for cars!

Reach Upward said...

Robin, I'm flattered. Frank, I remember reading that post. You made some very good points in just a few paragraphs.