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Wednesday, June 13, 2012

Can healthcare be a right if it contains both needs and wants?

The argument goes something like this. Markets have been shown to be the mechanism by which scarce resources are allocated most efficiently and the way to solve the health care scarcity, allocation and cost problems is better use of market mechanisms. The counterpoint is that health care is different. It is so important and so central to human existence that it cannot be trusted to the market. It reminds me of that deep philosophical discourse of my young adulthood:
Taste great! Less filling!

I must admit that I am a free market guy. I will admit this but I am also willing to listen to the contention that there is something fundamentally different about health care which might require that we generate some sort of market carve out.  The statement that health care is different is used as a discussion stopper, requiring no further justification or data to support it, something on the order of the belief that mothers, children, and apple pie and inherently good.

I suspect that this contentious issue may not be fully resolved by deeper discussion, but it sure could be fleshed out more substantially.  Such a discussion might allow us to define where legitimate grounds for disagreement might exist, which assumptions are behind each position, and what the downstream consequences are for embracing particularly stances.

Because of this belief that health care is different, many contend that health care is a basic human right. Whether you believe that any human rights can and should be defined as positive rights, that is rights to some good or service created by another human being is the larger question. If I were to embrace the concept that health care is different from the remainder of things delivered by market forces, there must be defined in some way which these specific differences can be defined.  What this means is health care goods, services, and activities can defined  as distinct from everything else and that classified as lying within the health care domain exhibit some specific criteria which distinguish them from non-health care. We can call this a definition of scope.

Once we have made the leap to create a legal entitlement, definition of scope becomes essential to define. Within the world of voluntary exchange, what is exchanged and how has infinite possibilities. Once exchange becomes mandated by law, the flexibility all but disappears. To define what the scope of the health care entitlement is no minor task, but the justification for such an ambitious undertaking is simple; health care is different.

This leads us to the obvious question. How is health care different and what is it different from? It is remarkable how often this claim is made and how little has been written to critically address the assumptions underlying this assumption. It is reasonable to assume that health care could be viewed as a right if the following conditions were met;

1. Access was required for near term survival or functioning
2. Those requiring access are not in a position to negotiate for their immediate needs

I believe the key word in this analysis is need. One can perhaps justify legal entitlement status for essential human needs. However, how do you define human needs and distinguish them from human wants? Humans cannot survive without food, water, and protection from the elements. These are unquestionable human needs. However, our wants relating to these domains extend well beyond what we need. We can survive and actually do reasonably well physically on a simple diet and basic shelter. Most everyone strives for more. It is what we do.

We have no defined universal minimum standards in the US for food and shelter. For the most part, the resources required to feed people and protect them from the elements can and are met in the US. Food is plentiful and cheap and our major concerns revolve around obesity and not hunger. There is huge variation in the quality of housing in the US, but the poorest of US housing still vastly surpasses a minimum standard to protect occupants from the elements. It may not be optimal but we are able to provide a minimum standard for nearly all US residents.

Health care provides problems that food and shelter do not. At the extremes it is relatively easy to distinguish between health care wants which do not qualify as health care needs. Few would argue that plastic surgery in normal teenage girls is a health care need. However, it quickly gets more difficult. The original Oregon Health Plan quickly discovered this quandary.  This controversy reached national attention when (from Wikipedia):

“During 2008 and 2009, the Oregon Health Plan stirred up controversy when enforcing 1994 guidelines to only cover comfort care, and not to cover cancer treatment such as chemotherapy, surgery and radiotherapy for patients with less than a 5% chance of survival over five years.
Springfield resident Barbara Wagner said her oncologist prescribed the chemotherapy drug Tarceva for her lung cancer, but that Oregon Health Plan officials sent her a letter declining coverage for the drug, and informing her that they will only pay for palliative care and physician-assisted suicide. She appealed the denial twice, but lost both times. Tarceva drugmaker Genentech agreed to supply her the $4000-a-month drug for free. Wagner's plight garnered a flurry of attention from the media, the blogosphere, and triggered protest from religious groups. Wagner died in October 2008. “ 

 If we could define basic health care needs, we could perhaps reach an agreement regarding should be part of the entitlement. However, this is simply not possible. Was Wagner's desire to be treated for cancer a need or a want? This will not be an isolated extraordinary circumstance. Decisions like these will need to be made every day in places all across the country.  Who could be charged with making such decisions? If you think these are handled clumsily by the private sector now, just wait until the state becomes the dominant player. Richard Epstein warned of this in his book Simple Rules for a Complex World:

“This conception of individual welfare rights survives on the na├»ve belief that government can continue to fund the right without dictating the plan of service. Yet protection of these newly minted positive rights invests government at all levels with vast powers to tax, to regulate, and to hire the very individuals whose rights it is duty bound to protect. “

 This has all been seen and discussed before. The needs and wants dilemma was eloquently summarized by  Eva Ryten in the 1998 Journal of the Medical Association of Canada (156: 650) when she wrote a response to a critique of an article on projecting future physician manpower needs in the Canadian health care system.  
“I have always steered clear of discussing health care “needs” and “wants” because in the context of a fully publicly funded health care systemthis is a sterile debate. Almost the first lesson of economics is that if price is reduced, demand increases. Although all publicly provided health care must eventually be paid for through taxation, to the consumer of health care the price at the point of consumption is essentially zero.

When the price of a good is zero, demand will be unconstrained. No wonder health care budgets are regularly exceeded, and how easy it is to blame this on physicians for inducing demand merely to meet their income targets. Where there are no prices, any distinction between needs and wants is meaningless. That economists should advocate that the health care system be funded in such a way as to eliminate any incentives for sensible use of resources strikes me as bizarre. Rosenquist should ask the economists how they are going to ensure that, in the absence of price mechanisms of any kind, only health care “needs” are going to be met.”

I again am reminded the of Albert Einstein Einstein who said:

“If I had an hour to solve a problem and my life depended on it, I would use the first 55 minutes to formulate the right question because as soon as I have identified the right question, I can solve the problem in less than five minute.”

We have invested huge amounts of time to solve a problem we do not understand. We have made assumptions that health care is different without doing the hard to work to define how of if it is different. Ultimately it all comes back to age old problems with human wants and desires. This is not where policy wonks excel.

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