Wednesday, July 8, 2009

How to Evaluate Health Care Plans


David Leonhardt, an economics journalist for the New York Times, has a great article describing one way to evaluate the upcoming health care legislation, he sets up the issue:

Right now, men with the most common form — slow-growing, early-stage prostate cancer — can choose from at least five different courses of treatment. The simplest is known as watchful waiting, which means doing nothing unless later tests show the cancer is worsening. More aggressive options include removing the prostate gland or receiving one of several forms of radiation. The latest treatment — proton radiation therapy — involves a proton accelerator that can be as big as a football field.

Some doctors swear by one treatment, others by another. But no one really knows which is best. Rigorous research has been scant. Above all, no serious study has found that the high-technology treatments do better at keeping men healthy and alive. Most die of something else before prostate cancer becomes a problem.
And why this is a problem:
But if the treatments have roughly similar benefits, they have very different prices. Watchful waiting costs just a few thousand dollars, in follow-up doctor visits and tests. Surgery to remove the prostate gland costs about $23,000. A targeted form of radiation, known as I.M.R.T., runs $50,000. Proton radiation therapy often exceeds $100,000.

And in our current fee-for-service medical system — in which doctors and hospitals are paid for how much care they provide, rather than how well they care for their patients — you can probably guess which treatments are becoming more popular: the ones that cost a lot of money.
This really is a critical piece of any health care legislation that is passed. In my opinion, universal coverage takes a back seat to getting the costs, which are crippling industry and entrepreneurship, under control.


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