Menzel's project Notes for November 6

Main points

Our overview of health policy focused on one reading: the introductory parts of Paul Menzel’s Strong Medicine.

The big ideas

Menzel’s big idea is that we can reconcile our twin commitments to using our resources efficiently and to addressing those who need health care as individuals by using individual consent.

As Professor Brown noted, “efficiency” has a particular meaning. It means allocating a set budget so as to produce the best health outcomes for the most people. Yes, that’s hard to measure, and that fact generates a lot of puzzles. But we know that spending our health budget on, say, marketing insurance plans, is clearly inefficient in this sense.

But what about consent? That’s going to pose lots of problems too. The basic idea seems sound enough. Individuals can make decisions about what sorts of risks they want to cover and what risks are too expensive to cover, given other uses of their resources. Artificial hearts, for instance, are a bad bet. Paying for the opportunity to have one doesn’t improve your chances of living but it does remove lots of other care that you might want to have.

So, the big idea goes, we can satisfy our qualms about denying an artificial heart to someone who needs one on the grounds that our decision reflects the patient’s own choices. Providing a patients with all the care they need is not the only way of treating them as individuals. Using resources efficiently is also a way of addressing those who need health care as individuals.

Why not real consent?

OK, so why talk about having the government or doctors decide when to ration care? Why go through the sometimes tortured hoops of finding obscure sources of “consent” in, say, voting or residing in a country? Why go through the even more tangled nest of figuring out what “hypothetical consent” a patient may have given? Why not redesign the health system to collect actual consent?

You could do this in a number of ways. One would be to make the market for health insurance entirely individual: no more insurance from the government or your employer. Everyone picks their own insurance plan and then we have all the consent we need.

There are several disadvantages to that. First, we probably can’t live with it. We just won’t turn people with medical emergencies away, even if they don’t have the money or insurance coverage to pay for care. As Bernice pointed out a couple months ago, we have a paternalistic attitude towards health care: it’s something that people need whether they want it or not.

Second, individual health insurance markets are inefficient: they have a lot of administrative overhead (see part 4 of the handout). If there is an acceptable alternative, then it makes more sense to spend the money on health care rather than administering insurance plans.

Third, I doubt we’re good enough consumers. Sunstein and Thaler point out how we’re lousy investors. I suspect we’re equally lousy consumers of health insurance. It raises the same sorts of problems and adds on new ones. (The evidence on this point is equivocal, however; see part three of the handout).

But individual health insurance markets aren’t the only way to collect actual consent. We could give people choices in a public plan, as Professor Brown described. (Though the third problem would rear its head there too.)

I suppose that Menzel’s position should lead him to support collecting actual consent whenever that is possible. I think that Zach is right that his primary focus was on trying to make decisions about what to do under the system that we actually have. That system is not arranged with a menu of choices and so on. Yet we have to make decisions about what kinds of care to provide.

Here’s an analogy. Suppose I’m in an accident, unconscious, and need treatment. The doctors will have to make decisions about what to do without my actual consent. Can they cut into my body in order to save my life? They will usually do the obvious: cut away! Why? Because they’re presuming that’s what I would want them to do. We have to make our best estimates of what people would want all the time. Menzel is trying to extend that to broader decisions about policy.

This page was written by Michael Green for Freedom, Markets, and Well-Being, PPE 160, Fall 2008. It was posted November 8, 2008.
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