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Will Clinton’s Plan Be Fair?

Many politicians and some doctors say that much of the new technology is “unnecessary” or “wasteful.” They do not mean that it provides no benefit at all. They mean that its benefit is too limited to justify its cost, and this is an argument for rationing, not an argument that rationing is unnecessary. There is an emerging consensus among doctors that routine mammograms for women under fifty, which are expensive, do not save many women’s lives. But they do save some.8 Heroic transplants that rarely work do work rarely. So we cannot defend the decisions the act makes, or the board would make, as simply avoiding waste. We cannot avoid the question of justice: what is “appropriate” medical care depends on what it would be unfair to withhold on the grounds that it costs too much. That question has been missing from the public debate, perhaps because the most emotionally laden decisions have been assigned to a board that would not be created until after the act is passed. But it is time the public began to take the question seriously.

2.

For millennia doctors have paid lip service, at least, to an ideal of justice in medicine which I shall call the rescue principle. It has two connected parts. The first holds that life and health are, as René Descartes put it, chief among all goods: everything else is of lesser importance and must be sacrificed for them. The second insists that health care must be distributed on grounds of equality: that even in a society in which wealth is very unequal and equality is otherwise scorned, no one must be denied the medical care he needs just because he is too poor to afford it. These are understandable, even noble, ideals. They are grounded in a shared human understanding of the horror of pain, and, beyond that, of the indispensability of life and health to everything else we do. The rescue principle is so ancient, so intuitively attractive, and so widely supported in political rhetoric, that it might easily be thought to supply the right standard for answering questions about rationing.

In fact, however, the rescue principle is almost wholly useless for that purpose, and the assumption that it sets the proper standard for healthcare reform has done more harm than good. The principle does offer an answer to the question of how much America should spend on health care overall: it says we should spend all we can until the next dollar would buy no gain in health or life expectancy at all. No sane society would try to meet that standard, any more than a sane person would organize his life on that principle. In past centuries, however, there was not so huge a gap between the rhetoric of the rescue principle and what it was medically possible for a community to do. But now that science has created so many vastly expensive forms of medical care, it is preposterous that a community should treat longer life as a good that it must provide at any cost—even one that would make the lives of its people barely worth living.

So the rescue principle’s answer to the question of how much a society should spend on health care overall must be rejected as incredible. Once that answer is rejected, the principle has no second-best or fallback level of advice: it simply is silent. That is worse than unhelpful, because it encourages the idea that justice has nothing to say about how much a society should spend on health care, as against other goods, like education or controlling crime or material prosperity or the arts.

The rescue principle does have something helpful, though negative, to say about the other question of justice, which is how health care should be distributed. It says that if rationing is necessary, it should not be done, as it now largely is in the United States, on the basis of money. But we need more positive advice: What should the basis of rationing be? The egalitarian impulse of the principle suggests that medical care should be distributed according to need. But what does that mean—how is need to be measured? Does someone “need” an operation that might save his life but is highly unlikely to do so? Is someone’s need for life-saving treatment affected by the quality his life would have if the treatment were successful? Does the age of the patient matter—does someone need or deserve treatment less at seventy than at a younger age? Why? How should we balance the need of many people for relief from pain or incapacity against the need of fewer people for life-saving care? At one point the procedures of an Oregon commission appointed to establish medical priorities ranked tooth-capping ahead of appendectomy, because so many teeth can be capped for the price of one operation. Why was that so clearly a mistake?

We need a different, more helpful statement of ideal justice in health care, and we should start by noticing one problem that seems to make reform mandatory. Why does America spend so much—so much more than other nations—on medicine? In large part because individual decisions about how much health care to buy are made by patient and doctor but paid for by a third party, the insurance company, so that those who make the decisions have no direct incentive to save money. Insurance premiums are tax-deductible, moreover, and an employer’s contribution is not treated as part of the employee’s taxable income. So health insurance makes patients insensitive to cost at the moment of decision, and the real price of that insurance is subsidized by the nation. People would probably spend less on their own or their family’s care if they had to pay the actual cost themselves, at the expense of other goods and opportunities they might also want or want their families to have.

Of course, in the long run most people do pay the true costs of their health care, but they do so indirectly and unwisely, because employer contributions and tax funds could be used to buy what they would choose to have if they made the choice themselves: better schools for their children, for example, or economic investments and programs that would improve America’s competitiveness and give them greater job security. Our medical expenditures are therefore irrational: the system makes choices for people that they would not make for themselves, and the result is that our collective expenditures are too high—measured, as they should be, by how much care we really want, taken together, at the price we really want to pay.

Conservative economists seize on this fact: they say we should create a free market in health care by removing all tax benefits and subsidies so that people can have only the care they can afford. While that is, of course, an unacceptable solution, it is important to see why. It is unacceptable for three reasons. First, wealth is so unfairly distributed in America that many people would be unable to buy any substantial health insurance at market rates. Secondly, most people have very inadequate information about health risks and medical technology; they do not know what the risk of breast cancer is before the age of fifty, for example, or how much, if any, routine mammography before that age would add to their life expectancy. Third, in an unregulated market, insurance companies would charge some people higher premium rates because they were greater health risks (as, indeed, many insurance companies now do) so that people with a poor health history, or who were members of ethnic groups particularly susceptible to certain diseases, or who lived in areas where the risk of violent injury was greater, would be charged prohibitive rates.

This analysis points to a more satisfactory ideal of justice in health care—the “prudent insurance” ideal. We should allocate resources between health and other social needs, and between different patients who each need treatment, by trying to imagine what health care would be like if it were left to a free and unsubsidized market, and if the three deficiencies I have just described were somehow corrected. So we should try to imagine that America is transformed in three ways. Suppose, first, that the distribution of wealth and income is as fair as it possibly can be. In my view, that means that the resources people can initially command, in making their decisions about education, work, and investment, are as nearly equal as possible;9 but you should imagine an economic distribution that is fair according to your own views, whatever these are. (I shall assume, however, that on your views, as on mine, the wealth of everyone in a fair society would be much closer to the average than is true in America now: the great extremes between rich and poor that mark our economic life now would have largely disappeared.)

Second, imagine that America has also changed so that all the information that might be called state-of-the-art knowledge about the value and cost and side effects of particular medical procedures—everything, in other words, that good doctors know—is generally known by the public at large as well. Third, imagine that no one—including insurance companies—has any information available about how likely any particular person is to contract any particular disease or to suffer any particular kind of accident. No one would be in a position to say, of himself or anyone else, that that person is more or less likely to contract sickle-cell anemia, or diabetes, or to be the victim of violence in the street, than anyone else.10

The changes I am asking readers to imagine are very great, but they are not, I think, beyond the reach of the imagination. Now suppose that health care decisions in this transformed community are left simply to individual market decisions in as free a market as we can imagine, so that doctors and hospitals and drug companies are free to charge whatever they wish. Medical care is not provided by the government for anyone, nor are medical expenses or health-insurance premiums tax-deductible. There is no need to subsidize medical care in any such way, because people have enough resources to buy, for themselves the medical care they decide is appropriate. What kind of health-care institutions would actually develop in such a community? Would most people join health maintenance organizations that provided care by staff doctors at a relatively inexpensive rate? Would any substantial number choose more expensive insurance arrangements that allowed more freedom of choice in doctors or hospitals? Would the average plan or policy provide coverage for routine medical examinations or diagnostic screenings? What kind, how often, and at what age? How many plans or policies would provide, at appropriately high rates or premiums, experimental or very expensive or high-risk or low-expected-benefit procedures of different kinds? How much of its aggregate resources would the community devote to medical care through these various individual decisions?

  1. 8

    See Gina Kolata, “Mammogram Guideline is Dropped,” The New York Times, December 5, 1993, Section 1, p. 30.

  2. 9

    I explain this conception of economic fairness in “What Is Equality?” Part 2, which appeared in Philosophy and Public Affairs, Fall 1981.

  3. 10

    I am ignoring an important issue that my argument raises, but that I will not pursue here. Is it right, in the hypothetical exercise I am constructing, to exclude information relating risk of disease to voluntarily chosen behavior? Should insurance companies be in a position to charge cigarette smokers or mountain climbers higher premiums, for example? That seems reasonable. But, if so, what counts as voluntary behavior? Should sexual behavior of a particular kind be treated as voluntary for this purpose? It would seem wrong for insurance companies to charge active male homosexuals higher premiums because they are considered more likely to contract AIDS. Is this because sexual preference is less under people’s control than nicotine addiction? Or because the sacrifice in giving up sex is so much greater than giving up smoking?

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