Wednesday, July 15, 2009

The public option in health care

Brad Delong has one view of this debate. There appear to be some contentiousness regarding what the public option is trying to achieve: Is it equality of access to health care or equality of health care?

Virginia Postrel illustrates the difficulties of the latter (also here):

For breast cancer that hasn’t spread elsewhere in the body, Herceptin offers the possibility of a cure. It enhances chemotherapy, encourages the immune system to attack cancer cells, and hinders those cells from reproducing. A year of the drug, with one dose every three weeks (or, for some patients, along with weekly chemotherapy), is now the international standard of care for patients with cancers like mine. So, along with chemotherapy, another round of surgery, and seven and a half weeks of daily radiation, that’s what I got. The Herceptin treatments cost my insurer about $60,000. A year later, I have no evidence of disease and, though it’s still early, I have hope of staying that way indefinitely.

Not everyone in similarly rich countries is so lucky—something to remember the next time you hear a call to “tame runaway medical spending.” Consider New Zealand. There, a government agency called Pharmac evaluates the efficacy of new drugs, decides which drugs are cost-effective, and negotiates the prices to be paid by the national health-care system. These functions are separate in most countries, but thanks to this integrated approach, Pharmac has indeed tamed the national drug budget. New Zealand spent $303 per capita on drugs in 2006, compared with $843 in the United States. Unfortunately for patients, Pharmac gets those impressive results by saying no to new treatments. New Zealand “is a good tourist destination, but options for cancer treatment are not so attractive there right now,” Richard Isaacs, an oncologist in Palmerston North, on New Zealand’s North Island, told me in October.

The concerns of those opposing the public option - that it might not save any money and would create a large and inefficient bureacracy - are real. Those without insurance are already imposing a cost on the rest of society by using emergency medical care so perhaps doing nothing wastes less money than establishing a public option.

Which one is more inefficient we don't really know but the evidence from countries with some form of public insurance or those that promote equal access is that there will be a divergence in care. Those who are rich and can afford the drugs/treatment that are not available via a public option will find it while those who cannot will be denied the treatment.

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