Sunday, September 20, 2009

Why Health Care Will Never Be Equal - By Gregory Mankiw

This semester, I am taking Principles of Macroeconomics at college. I found an excellent editorial related to the health care debate written by Gregory Mankiw, who actually wrote my college textbook. As I found it very interesting, I hope that you do, also.

EVERY morning, I take a small white pill that makes me think deep philosophical thoughts about the American health care system, the value of life, and the relationship between man and state. No, it is not some illegal psychedelic left over from the 1960s along with my tie-dyed T-shirts. But if you bear with me, I bet this pill will have the same effect on you.

The pill is a statin — a type of pharmaceutical developed over the last few decades to lower a person’s cholesterol. My father died of cardiovascular disease, and unfortunately I inherited his genetic predisposition. Yet I am hoping that modern medicine will help me avoid his fate. So like millions of middle-age men, I take my little pill every morning.

Here is the question I ask as the pill passes through my lips: Is it worth it?
Now you might be tempted to say, “Of course it is.” Most people would prefer to avoid an early death. If the wonders of modern science might put off the inevitable for a while longer, why not give it a shot?

And that is, indeed, how I thought about the decision when my doctor recommended the treatment. One thing I did not consider was the price. Like most consumers of health care, I was insulated from economic concerns. I knew that the insurance company — and, indirectly, all its policyholders — would pick up most of the tab. This arrangement, encouraged by the tax system, ensures that I get the benefit of the pills while paying little of the extra costs they generate.

An optimist might hope that my doctor, or someone higher up in the health care hierarchy, made a rational cost-benefit calculation on society’s behalf. To figure out whether my treatment makes sense, one would have to weigh the cost of the drug against the benefit of an extended life. And to do that, one would have to put a dollar value on my life — the kind of calculation that makes everyone but economists squirm.

Not long ago, I read that a physician estimated that statins cost $150,000 for each year of life saved. That approximate figure reflects not only the dollars patients and insurance companies spend on the treatment but also — and just as important — an estimate of how effective it is in prolonging life. (That number is for men. Women have a lower risk of heart disease.)

That estimate is, at best, approximate, but it certainly suggests that preventive care is not always cheap. The magnitude of the figure also brings to mind hard questions of political philosophy. CONTINUED


Nickie Goomba said...

Thanks, Terri. This is an excellent post. As the days tick by, the people are catching on to the scam we are being forced onto.

Good one!

Opus #6 said...

150K per year of life. Wow. Great post, completely original subject and educational. Thank you.

The idea of placing a value on human life reminds me of the holocaust.

Germans first executed Jews using bullets. That was too expensive. So they switched to gas. Much cheaper. As time went on, money got tighter, and they found out they could use half the amount of gas if they left the prisoners in the gas chamber twice as long. MORE COST SAVINGS.

urbanhumanist said...

I read Mankiw, and often disagree with his perspective. But, this time, his figures are flat out wrong. For a better, less biased and peer reviewed numbers, see:

nyp said...

I am trying very hard to figure out what the point is of this post. Is it that because it is hard to place a "value" on health care we should not help people who need medical care? Is it that we should abolish Medicare? Is it that when an expectant mother shows up at a maternity ward and doesn't have the money to pay for a delivery the hospital should turn her away?
Someone help me out here, for this post seems as antithetical to the little I know of Catholic ethics as anything I have ever read.

Most Rev. Gregori said...

This is a real conundrum. Who pays and who gets?

To NYP: It is not our Christian duty to pay ever increasing taxes to pay for all the needs of the poor. Jesus says that we should care for the poor, but that care must come from the heart of each individual not forced on them by the government. With nationalized health care, every body suffers. Besides, Obama and company are less interested in providing quality health care for all, they are more interested in the power and control they will have over peoples lives if they can take over the entire health care system.

And just something else for you to think about; Obama wants to take student loans away from private bamks and loan companies and put the government incharge. Do you honestly think it is because he wants everyone to have accsess to a good college education? If you do then you are completely naive. First of all it will once again place a larger tax burden on those who work and can't go to college and second, that college tuition provided by the government will come with plenty of strings attached, giving the government ever more control over the lives of those going to college.

Teresa said...

I am very happy that more people everyday are catching onto th hug scam Obarmy is trying to pull on us.

Teresa said...

We should NEVER put a price on human life. The Democrats are going from doing that with abortion, to doing the same with our health care. Unfortunately, I do see many similarities between Obama and Hitler. Really scary :(

Teresa said...

Mankiw's only biased in the sense that since he takes the statins, he actually knows the cost of the pills. He has computed the total cost of what his insurance company pays and what he in fact pays for the pills. I guess if you call reality biased, so be it.

The article you linked to shows the study was done in Australia, Brussels, and the Netherlands so it is not accurate in reference to the United States.

Plus it states,"Although trials agree on the size of the benefit, economic analyses of statins report contradictory results." So, in fact there is no agreed upon economic analysis in regard to the results of statins.

The Gray Headed Brother said...

Teresa said...
We should NEVER put a price on human life. The Democrats are going from doing that with abortion, to doing the same with our health care. Unfortunately, I do see many similarities between Obama and Hitler. Really scary

Are you for real?????
Are you a "So Called" American going to relate the president of the United States of America with the likes of "Hitler" People like you are what's "Really scary"

Teresa said...

The Gray Headed Brother,
I hope you took your lunatic liberal friends to task when they made the comparison between Bush and Hitler. If not, you have no room talk.

Teresa said...

All this post does is show that there's alot of things to consider as far as health care goes. And, that health care will never be equal. Its just a matter of who will distribute the inequities.

Teresa said...

Most Rev. Gregori,
Your right. To be charitable is an obligation of Christians. Being forced to give is wrong.

Obama doesn't want everyone to have a good college education. He wants to be able to control citizens every move and by having strings attached to student loans he can begin his indoctrination process, and his civilian army.

Ray said...

A note..

As an MS patient I've taken therapies daily for years that cost 25-30,000 a year, $250 a month co pay by the way.. now I'm walking again...

However they weren't designed for that outcome, just to prevent worsening of the disease...I got lucky I guess.

Statins pretty much the same thing...designed to help Cholesterol and have also proven effective preventing MS advancement

I really liked this part of the post as well...

"N. Gregory Mankiw is a professor of economics at Harvard. He was an adviser to President George W. Bush."

I knew he was smart, but smarter than I thought. lol

Teresa said...

That is awesome. I think that might qualify as a miracle. Regardless, that's pretty amazing!!

Thanks for the interesting tidbit about statins related to MS.

urbanhumanist said...

Gregory Mankiw, an economist, serving in the Bush administration quoted a conservative physician in the Wall Street Journal to come up with the number $150,000. Mankiw did not compute that number himself, as her writes in the article.

Further, teresamerica writes that
"He has computed the total cost of what his insurance company pays and what he in fact pays for the pills. I guess if you call reality biased, so be it." That is not an economist would calculate the $150K number (ask your professor, if you don't believe me.)

Rather, figuring out how much a drug costs for each year of life saved follows a complex formula, that takes into account the cost of a drug, but also that takes into account the likelihood of death during a giving year as well as the efficacy of treatment. Life expectancy is calculated as well.

Epidemiological studies of the cost/benefit of statins do indeed vary by country but not as much as you might think since the costs of drugs are constant across the international landscape (though who pays those costs is not) as are the risk factors for diseases. This is especially true in the developed world, where those studies originate. The variance discussed has to do with the degree of risk that a patient has, not the national origins of a patient. Such meta-analyses are considered more statistically robust than single studies.

As for placing a $$ value on life, that is something that economists, not the President.

Further, comparing President Obama to Hitler is not only a ridiculous claim, it reveals real ignorance. And, Christians should be especially sensitive to their historic culpability in the rise of Hitler, as well as their part in the rise of anti-Semitism in western cultures.

Such exaggerations undermine civil society and breed incivility.

And, Most Reverend, your perversion of the preachings of Jesus Christ suggests the false promises of Satan or man, not of a learned man of God. Never once, not once, never did Christ qualify how the poor should be cared for, to quote your version of Jesus,"but that care must come from the heart of each individual not forced on them by the government." You should be ashamed; thankfully, many of us will not allow the word of God to be corrupted by false prophets.

Teresa said...

Not ignorance at all.

Hitler was a combination of a socialist and a fascist. Obama is both.

Hitler had a charismatic personality. So does Obama.

Hitler supported and instituted
abortions as acceptable. Obama is a staunch pro-abortion advocate.
Obama wants to expand that cause to the extreme.

Hitler took over the German banks. Obama's taken over our banks.

Obama wants a civilian army. HItler had a civilian army.

So, the comparison is not as far fetched as you might think.

Mankiw's main point was not based on the cost of statins, but related to the fact that no matter who runs the health care system, there will always be inequities.
Health care will never be equal.

nyp said...

You know, this is why liberals like me look at "conservatives" today and see a commplete train wreck. It is so much the hateful devaluation of the uniqueness of the Holocaust by comparing a democratically-elected President of the United States to Hitler. It is that when a utilitarian like Greg Mankiw writes an essay whose message is that thatthe value of both health care and human lives must be analyzed in cost-benefit terms, people here actually interpret it to mean that: (a)one "should never put a price tag on a human life"; and (b) nothing should be done about the unavailability of health insurance for American families.
A movement whose thinking has become so incoherent can no longer be taken seriously.

P.S.: I regret that "Most Rev. Gregori" (as he at least calls himself) wishes to abolish Medicare and Social Security. I happen to disagree.

Teresa said...

Hitler was democratically elected. Obama was democratically elected. And, both were elected at times of economic turmoil. That is why Hitler was so embraced. Obama was embraced in a similar fashion.

You just don't get it!!! OMG You moron. You just don't get it!!!! After writing this many times, Mankiw was not putting a price on a life!!!!!!! He was not putting a price on a life... In fact he was saying just the opposite. He was saying regardless of who distributes health care, health care will never be equal!!!!!! There will always be inequities with regards to health care and whether a "rich" person can gain access or whether a "poor" person cannot get access to the same health care.

nyp said...

Teresa's post pretty much illustrates my point. Not much to add to that.

Teresa said...

Thanks for admitting that you cannot comprehend Maniw's point. Thanks for admittting you have no capacity for comprehension whatsoever. Go love the government. Hope you won't be waiting too important from them. And still waiting.... like rationing?