Peter Singer on Health-Care Rationing

Via Conor Clark, I find Peter Singer in the NYT saying this:

If the Department of Transportation [followed the principle that it was impossible to put a dollar value on human life] it would exhaust its entire budget on road safety. Fortunately the department sets a limit on how much it is willing to pay to save one human life. In 2008 that limit was $5.8 million. Other government agencies do the same. Last year the Consumer Product Safety Commission considered a proposal to make mattresses less likely to catch fire. Information from the industry suggested that the new standard would cost $343 million to implement, but the Consumer Product Safety Commission calculated that it would save 270 lives a year — and since it valued a human life at around $5 million, that made the new standard a good value. If we are going to have consumer-safety regulation at all, we need some idea of how much safety is worth buying. Like health care bureaucrats, consumer-safety bureaucrats sometimes decide that saving a human life is not worth the expense. Twenty years ago, the National Research Council, an arm of the National Academy of Sciences, examined a proposal for installing seat belts in all school buses. It estimated that doing so would save, on average, one life per year, at a cost of $40 million. After that, support for the proposal faded away. So why is it that those who accept that we put a price on life when it comes to consumer safety refuse to accept it when it comes to health care?

I find this bizarre and confused. Maybe I’ve missed it, or I run in the wrong circles, but I never had the impression that the argument against government rationing of medical treatment was that you can’t put a price on human life. Of course you can! Individuals do it all the time through their rationing–through occupational choices, consumer choices, residential choices, transportation choices, and health and medical choices, all of which reveal how much the individual is willing to pay to avoid an X% risk of death. As Singer mentions, this is how the Consumer Product Safety Commision comes to estimate the cash value of a life: by taking an average of revealed willingness to pay in these kinds of individual choices. The argument against government rationing of medical care is not that life is infinitely valuable, but that government has no legitimate authority to decide how much an individual should be allowed to pay.

Suppose Peter Singer came along and told you that the data show that, on average, Americans value their lives at six million dollars, and that therefore you shouldn’t be able to spend seven million dollars on yourself, since your whole life isn’t even worth that much. Would you be impressed? I hope not!

Individuals trade reductions in risk of death against other goods in the context of their own limited budgets. (I.e., they ration their resources.) What you are willing to pay to reduce the risk of death depends in large part on how much you’ve got to spend. If individuals with a ton of money spend boatloads on medical care, they are thereby revealing how much they are willing to pay to reduce the risk of death and are thereby pushing up the average willingness to pay for extra life. For the government to step in and limit spending on medical treatments on the basis of the fact that the limit reflects the average willingness to pay for extra life is exactly like government stepping in to limit how much individuals can pay for extra safety features on a car on the basis of what people do tend to pay. This stupidly takes an evolving average as normative while cutting off the possibility of further evolution.

Of course, the government, like individuals and families, has a limited budget. So if the government is going to pay for medical care, it has to ration. And that very fact is an argument for limiting the government to only paying for the care of people who are unable to pay for a minimum of care themselves.

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30 thoughts on “Peter Singer on Health-Care Rationing

  1. I think this explanation by Will goes a long way to illustrating why the rationing argument makes no sense coming from the right. The last paragraph doesn't make sense to me unless there is an assumption that government run health insurance will be all that is available, and that doesn't seem remotely possible. The government will indeed ration and if you find the rationing too limiting, then you can a) pay for additional treatment out of pocket or b) buy additional gold plated coverage. My understanding is this is exactly what happens in most European countries including France. In fact this functions just like the marketplace where insurance companies make changes to coverage all the time based on what their customers want or are willing to pay for while also trying to squeeze a bit more profit.And the car metaphor is just plain silly. A closer metaphor would be the government providing everyone with a base Toyota Corolla and you'd have the option to pay for a better stereo, a sunroof, or maybe even a Camry! Now Canada has made the choice to not allow additional private coverage so the last paragraph makes sense if we were adopting Canada's system, but we're not, so it makes no sense.I love reading Will's stuff on inequality, but I can't jump on board with his arguments when he continues to put up roadblocks on universal health coverage and reform in general like most conservatives. Inequality wouldn't matter so much if there weren't a small percentage of people flush with ridiculous amounts of cash next to millions who have to think long and hard about their monthly budget before visiting the doctor when they are sick or losing their homes because of illness. As soon as we solve the very fixable problem of our ludicrous health care system, I, speaking as a staunch liberal, would be more amenable to Will's interesting ideas on inequality.

  2. Yes, I think you are confused. The government is not going to keep multimillionaires from spending their money to keep themselves alive.

  3. As I understand it, there was a supreme court case in Canada about whether it was constitutional to prohibit people from spending their own money in private clinics, as the statutory law did prohibit. Now, I don't think the U.S. system is going to end up like the Canadian system. But plenty of Americans would like it to end up that way. And in that kind of system, the question of whether the government can keep people from spending money on themselves has been a very live question.

  4. Who are these people? I mean, I guess I'd find the views of someone who actually to make privately provided medical services illegal</> to be pretty intolerable, and so wouldn't read his or her stuff. So maybe I just don't know. But the liberals I pay attention to are quick to assure their readers that they have absolutely zero desire to make it illegal for me to seek out my own care on my own dime.I don't know why you're worrying about this anyway. It's a moot point. I think there probably is a lot of support for substantial reform that makes the lives of poorer folks less risky, and that relieves people of the need to worry about money in trying times, but among the public the support for making private care illegal is vanishingly, astonishingly small. Really, the feds are going to haul a cancer patient and kindly doctor Smith off to jail for performing some crazy experimental treatment? Or fine them heavily? Just not going to happen given the current state of U.S. politics. (Medical marijuana blah blah blah. I know, but the politics of criminal justice issues work much differently.)Despite the U.S. system's famously undemocratic features (I'm looking at you, U.S. Senate!), the government really doesn't impose deeply unpopular policies on the public — indeed it can't, at least in the long run, regardless of who's in what office at any given moment. The political coalition that, with solids assists from Zeus and the Tooth Fairy, actually managed to push through a carbon copy of the Canadian system would last about six minutes. And it would end in a political catastrophe of world-historical proportions, which would make Bill Clinton's floundering about in support of his health care bill look comparatively smooth, like John Roberts at his confirmation hearings.

  5. Disqus ate my comment! Or it was deleted because I failed to use HTML tags correctly. In either event, who are people pushing to make it illegal for me to seek out my own care on my own dime if he government won't pay for something I want. And I don't think it's something to worry about. That would be so unpopular in the U.S. that there's about zero chance it, or anything at all like it, will happen.

  6. Well…. I’m speechless. The only way for me to respond to that is to say, “It can't happen here.” I mean that seriously, I would have to be really paranoid to think that could become federal law. I would love to see some state do that though. Just for the social experiment of it. I apologize for my initial post. It was rude. Since you responded I went and read everything carefully including the original Singer article and I found his article very good, especially the last page where he outlines what he thinks a good healthcare system for America would look like.Im glad you made a comment that got me involved but I think you do not do justice to Singers article. After reading the article I am certain he is not for limiting what people can spend, he explicitly states so. Maybe both your positions are close. He wants state sponsored health care to pay up to a certain amount after which people would be free to spend their own money.

  7. I'm really pretty confused, too–I understand the slippery slope argument you're making, but it just doesn't seem like the causal mechanism is plausible. Ok: a public plan gets subsidized enough that, through a combination of that, risk-pooling economies of scale, or whatever, it becomes hugely dominant in the “basic health care insurance” segment. What is the mechanism that leads to a ban on “luxury insurance,” which is precisely what you're talking about when you worry about bad cost/benefit-ratio treatments?If the worry is that no one will *perform* the treatments, that seems implausible–if nothing else, doctors would be happy to be paid out-of-pocket. The only worry here would be concerning malpractice liability–but that's a genuinely separable debate.If the worry is that only the rich will be able to *afford* the high cost/benefit treatments out of pocket–well, that's the status quo anyway.If the worry is that companies will only insure luxury treatments if they can cross-subsidize with basic ones, and so the govt's dominance of the basic-insurance market will kill the luxury-insurance market … I'm just not sure what to say to you. Because for that argument to be valid, it has to be the case that, in fact, folks *don't want* luxury insurance enough to pay actuarily-fair rates for it (not enough of them to create a market, at any rate). But then… so what?I get that you don't like Canada's system, or the NHS, but neither is on the table, and the institutional dynamics of what IS on the table seem much more likely to push towards, e.g., Germany or Australia. But how do your worries apply to these systems? The rationing in these systems is the same sort as here–by $$–but is generally restricted to the “luxury” sector.

  8. OK. I think you're right. I got myself confused. I don't think we're heading toward a ban on high-end spending. And the manifest demand for it is in fact why Medicare can't cut its costs and why putting more people in a Medicare-like government-run health plan has no chance whatsoever of bringing down overall costs. Anyway, the thing that struck me is that I've never heard anyone seriously make the “human life is priceless” objection to government rationing. The objection is to a system that denies people treatment or makes them wait a long time for treatment when there are alternative systems that cover everyone but do much less of that.

  9. Ok, point taken, but that's not likely to be on the table whether Republicans or Democrats are running things.

  10. Good catch. I guess Singer (and probably many of his sympathizers) wants to assert that lives have a finite, calculable value… but that this value is constant between people. Singer probably has confused an averaging of individual revealed preferences by the government for some kind of collective revealed preference, the latter of which is methodologically and philosophically incoherent, like “social indifference curves”, but is extremely seductive to certain collectivist thinkers.

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  12. Will,I think you're referring to Chaoulli v. Quebec.The Canadian Supreme Court decided 4-3 that the prohibition on private insurance violated Quebec's constitution (some of the judges also decided the prohibition violated the federal constitution, but they were in the minority.)My pal Peter Jaworski knows more about this, and hopefully he can enlighten us further.I am pretty sure that North Korea and Cuba are the only other countries that prohibit private expenditure the way Canada does. At the same time, there is a certain “moral logic” to the prohibition: it's probably meant to ensure that no one can get more health care than anyone else, no matter their income.Not that I'm endorsing this logic, but it has a high degree of resonance in Canada. Even our more conservative politicians don't dare propose anything like “two tier health care.”

  13. As for other countries' systems, apparently in Britain you can be denied NHS treatment if you purchase additional care. One source for such a story, another: “Officials said that allowing Mrs. Hirst and others like her to pay for extra drugs to supplement government care would violate the philosophy of the health service by giving richer patients an unfair advantage over poorer ones.”But, as others have pointed out, yours is only an argument against the above sick logic, not against universal health care per se.

  14. Of course, the government, like individuals and families, has a limited budget. So if the government is going to pay for medical care, it has to ration. And that very fact is an argument for limiting the government to only paying for the care of people who are unable to pay for a minimum of care themselves.And how do you propose we decide how much to spend on these people? All Singer is saying is that there are more or less reasonable ways to answer questions about whether a HMO should spend money on 'treatment X'. This is precisely the same calculation that was made by car companies with respect to air bags, shoulder belts, and central gas tanks. Engineers building airliners go through the same process. It's a methodology for deciding how to allocate resources to get 'bang for buck'. In fact, it's the same decision health insurance companies make every day about whether or not to “cancel Will's policy”. They're all putting a price on life. All Singer is saying is that we might as well just be explicit about it. On another note: When Singer says something, and it seems stupid? My working assumption is I'm the dumb one. Not him.

  15. The Singer article is a very well written definition of QALYs complete with the rationale behind them which is fair enough I suppose.Nevertheless, I hope fellow readers will find it useful to know that in England (other bits of the UK are still to make a final decision I think) you can buy extra drugs such as sutent, avastin, herceptin and the rest to top up your NHS care. The rationing body has also adjusted its QALY calculations to allow some of these drugs to be provided on the NHS. In short, the social solidarity principle that governments of either stripe spent a long time upholding has been ceded – as it had already in dentistry (North American readers stop sniggering) and prescriptions among other aspects.I also think it is important that we should not get fixated by these expensive drugs. Sutent and the rest are very expensive but are still pretty marginal in terms of overall health spend. Costs of diseases such as diabetes, Chronic Obstructive Pulmonary Disease COPD, heart disease generally, dementia and all the other illnesses associated with modern developed world will dwarf the spend on these drugs.What is more they do not cure anything. They might keep some people alive a bit longer and often with pretty terrible side-effects.In short, although it raises some interesting overall issues around healthcare and risk-pooling, there is a danger, i fear of becoming fixated on the debate around these drugs that misses out the other important healthcare questions.

  16. “Officials said that allowing Mrs. Hirst and others like her to pay for extra drugs to supplement government care would violate the philosophy of the health service by giving richer patients an unfair advantage over poorer ones.” Thats just sickening. (pun not intended, but HA!)

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  21. The guy is a moron. I knew that when I was studying philosophy years ago and he has only proved it even more in recent years.

  22. Actually, I'll go out on a limb here and defend the Canadian system.But first, Will's quote:Individuals do it all the time through their rationing–through occupational choices, consumer choices, residential choices, transportation choices, and health and medical choices, all of which reveal how much the individual is willing to pay to avoid an X% risk of death..The term willing is loaded. Most of the time, the term you actually mean is able. I don't think that anyone could seriously claim that someone who has only $50 to his name really only values his life at $50.And that is crux of the argument. Do the wealthy value their lives say a thousand times more than the homeless? I don't think there are many who would claim that they do. Perhaps a better way of evaluating how much you value your life is by what fraction of your overall net worth you'd sacrifice. But then the homeless would value there life *more*.In the end, there's no way of easily having people value their life that *isn't* really a proxy for how wealthy they are.In other words, those economists that would use value human lives by how much people are willing to spend to save them are essentially saying that a human life is valued by its wealth.While wealth means a lot, in many countries, like Canada, most people would be unwilling to say that the lives of the wealthy are more valuable than the lives of anyone else. Wealth may buy you more toys, and your children a more comfortable life, but it should not buy life itself.And that is what underlies Canadian-style health care systems to Canadians.

  23. Did you read the entire article? Singer does argue that public healthcare benefits be assigned on a utilitarian basis (as would be expected). That's what the article is about.The next-to-last paragraph (beginning “Rationing public health care limits free choice if private health insurance is prohibited.”) points out that this in no way needs to impede the ability of individuals to spend however much they wish on treatments which don't seem to be proven or cost-effective enough for the public to provide. Singer points to the Australian system, with which he is familiar, as a model.

  24. I think the objection here is largely a result of different people that you tend to be around. The notion of putting a price on human life and preferences for reducing risk of death in the future is uncontroversial for economists, but is likely to elicit revulsion in the general populace, and especially among Singer's detractors in the field of moral philosophy.What's old hat to you has to be explained and argued painstakingly for Singer's audience.None of which is to say that your argument that the government can't read price signals effectively enough to get an “objective” value of human life isn't valid.

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