Blog Post: The Price vs. the Cost of Health Care

Increasingly, the problem of health care “prices” is replacing the problem of health care “costs.”  That may sound like a meaningless distinction, but consider the opening sentence of the “Cost of Treatment May Influence Doctors,” an article in todays New York Times:

“Saying they can no longer ignore the rising prices of health care, some of the most influential medical groups in the nation are recommending that doctors weigh the costs, not just the effectiveness of treatments, as they make decisions about patient care.”

The focus, in other words, is not only society-wide health care costs as a percentage of GDP, but the price of particular interventions for particular patients.  The very premise of this lead, however, is both entirely unremarkable and extraordinarily concerning.

Imagine, for instance, that you are a physician in a country where health care is treated like a market good.  You are treating a patient with condition “X,” and the best treatment for this is highly expensive and will in fact bankrupt the patient and his or her family.  This treatment does, however, confer a tangible – but relatively modest – benefit over less expensive alternatives.  However loathsome you might find the concept of balancing cost and benefit, in that particular case at that particular moment, working within that system, you would have to: protecting your professional integrity by only offering the best treatment but making the family homeless without even discussing the issue would clearly be wrong.

However, by supplying superior treatments to patients who can afford them, and inferior treatments to those who can’t, you would be practicing class-based medicine, fundamentally violating the basic ethical precepts of the profession.

That’s why this scenario must be avoided entirely, why every country needs a national health program, and why societies that treat health care as commodities are fundamentally unjust.  Physicians should always advocate for the best treatment available for their patients, and should never be in the position of rationing care based on ability to pay.  Additionally, though much has been made in recent years of the problem of “fee for service” medicine, the problem of incentivizing physicians to skimp on care – which is gaining currency in some circles – is even more problematic.

At the same time, patients should not have to be in the position of balancing the price of different health care interventions with the theoretical benefits.  Life is complicated enough even when we’re healthy.  When ill, it’s even more difficult.  Having to calculate the comparative effectiveness of various interventions by dividing some metric of benefit by cost (difficult and controversial enough even for academics who do it full time), while simultaneously balancing the opportunity cost of these various options against other important life goods like rent or education is nigh impossible.  That’s the whole point of insurance: to “relieve your money worries in times of illness,” as a pamphlet about the British National Health Service put it in 1948.

That all being said, health care prices are too high, and I’ve said nothing here about how to lower them.  However, one way that prices must not be lowered is by making doctors into “merchants of health,” selling better care to the rich, and worse care to the poor.