This post is a part of our Bioethics in the News series. For more information, click here.
By Leonard Fleck, PhD
In the early 1970s we were talking about “lifeboat ethics.” If we could not feed everyone in lifeboat Earth, then who should we throw out? As we move further into the 21st century we seem to be pondering “fiscal cliff ethics.” Who should be thrown over the fiscal cliff in order to save the economy as a whole? Neither of these “ethical perspectives” should be thought reasonable, but much less necessary.
We in the US have a serious problem of health care cost escalation overall, but it is especially acute with regard to the elderly and the federal budget. In 2012 the total costs of the Medicare program will be a bit under $600 billion. Over the next ten years the most reliable projections put average annual growth of Medicare expenditures at 6.1%. That means Medicare will cost a bit over $1.1 trillion in 2022. The ten-year cost of the program will be about $8.7 trillion.
There are three major factors that are driving Medicare costs upward. These are: (1) the aging out of the “baby boom” generation, (2) costly new medical technologies, and (3) an increasing burden of chronic illness among the elderly (generated to a large extent by costly new life-prolonging medical technologies). Nothing can be done about the first factor. About 80 million baby boomers will join Medicare between 2010 and 2030. And they will live longer than any other generation of the elderly. So cost control efforts will have to be directed elsewhere.
Uwe Reinhardt, a Princeton economist, has called our attention to two “Great Equations”: Cost Control = Income Control; Cost Control = Care Control. These equations tell us where the major political challenges are in controlling Medicare costs. Our concern, however, is with the moral challenges of cost control. How should we assess from a moral point of view, the point of view of what a just and caring society ought to choose, the various options for cost control suggested by the quoted experts in the Kaiser Health News?
Joseph Antos, an economist at the American Enterprise Institute, is an advocate for a “defined contribution subsidy” to controlling Medicare costs. This is the basic mechanism for controlling costs advocated by Paul Ryan, former vice-presidential candidate. The major economic advantage of this option is that it would effectively control future Medicare costs, i.e., costs to the federal government. It would do very little to control overall health care costs because that would fly in the face of conservative free market principles. Instead, the value of the voucher or subsidy would be gradually eroded relative to medical inflation. That would mean that Medicare recipients would be able to buy health plans that offered less and less in the way of accessible medical services.
Private insurance plans might be legally obligated to offer plans that covered some fairly substantial package of Medicare benefits, but plans might have extraordinarily high copayments and deductibles such that access to costly but effective medical care was essentially rationed by ability to pay. The political advantage of this approach is that advocates can say government is not rationing care; Medicare recipients are freely making rationing decisions for themselves. This is hidden or invisible rationing, which is intrinsically unjust. Of course, if the care that Medicare recipients were denying themselves were marginally beneficial, non-costworthy care, then the moral objections would be largely dissipated. But the economically less well-off would not be able to make such distinctions; they would be denying themselves as often as not effective costworthy medical interventions as well as non-costworthy interventions. In short, the current basic equity of the Medicare program would end and access to needed health care for the elderly would reflect the differential access to care determined by individual ability to pay characteristic of the rest of the insurance market.
Bruce Vladeck, former administrator of the Health Care Financing Administration , argues for giving the Medicare program the power to bargain with pharmaceutical companies for discounts that reflected the purchasing power of fifty million participants. This is what is currently forbidden by law, thanks to the lobbying efforts of representatives of medical device and pharmaceutical companies. Such bargaining would yield substantial benefits for all Medicare recipients as well as the federal government. So this recommendation is morally desirable. The counter argument is that this will slow dramatically drug research and discovery. The response to that objection is that most of the drugs generated by the pharmaceutical industry over the past fifteen years have proven to be extraordinarily expensive and mostly marginally beneficial. There are better investments for those health care dollars than those drugs.
Other respondents in Kaiser News advocate for abandoning the fee-for-service mechanism for financing health care services because that motivates physicians to provide more care that yields little benefit. Accountable Care Organizations are supposed to be able to provide care more efficiently and with higher quality. But this will require enormous reorganization of our health care system. It will likely mean some decline in income for many physicians in medical specialty and sub-specialty areas, in part because a lot of their more routine medical work can be carried out by primary care physicians with some additional training. An outcome such as that is hardly of moral concern, given the income disparities between these sub-specialists in the US and their European and Canadian analogues.
More generally, several respondents emphasized the need for greater coordination of care, especially for individuals with complex chronic conditions. Greater efficiency is supposed to be the (morally) painless descent down from the fiscal cliff. This strategy also emphasizes eliminating waste and fraud in Medicare. However, identifying “waste” is not as morally benign an effort as this language might suggest. Approximately 28% of Medicare spending is for patients in the last six months of life, which comes to $2.3 trillion over our ten-year period. Is all of that “wasteful”? Or is the more accurate description “marginally beneficial”?
The language of waste disguises the moral issues; the language of marginal benefit forces us to face those issues. Efficiency efforts achieve one-time savings. Such efforts fail to address the upward cost pressures generated by new medical technologies. The just use of those technologies requires, to my mind, a painful public conversation about what we are willing to deny our future possible terminally ill selves in the way of extraordinarily costly marginally beneficial medical care. This is correctly described as health care rationing, but it is an honest and equitable and reasonable approach to rationing as opposed to the dishonest, inequitable, and unreasonable rationing implicit in proposed Medicare vouchers. The latter approach does represent fiscal cliff ethics; poorer vulnerable elderly patients are thrown over the fiscal cliff to protect publicly funded access to expensive marginally beneficial care for the well-off in our society. A just and caring society must do better than that.
This post was written in response to the article “Medicare Silver Bullets: What’s the Best Way to Control Costs?” published on the Kaiser Health News website on December 12, 2012.
Leonard Fleck, PhD, is a Professor in the Center for Ethics and Humanities in the Life Sciences and the Department of Philosophy at Michigan State University.
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