Playing the health care numbers game

If you thought health care insurance companies were all about the bottom line, and therefore, destroying health care in the United States, you best be aware of some of the alternatives – better described as lack of alternatives – provided by a government-run system.

David Gibberman over at American Thinker has an interesting article on the cost of so-called free government care. Gibberman hits the high points concerning why government health care does not work, and what changes would take place when you remove competition and incentive from the industry. Do read the full post, but I found this pretty interesting.

Patients Lose the Right To Decide What Treatment They’ll Receive. Instead, patients receive whatever care politicians and bureaucratic number crunchers decide is “cost effective.”

Britain’s National Institute for Health and Clinical Excellence [NICE] usually won’t approve a medical procedure or medicine unless its cost, divided by the number of quality-adjusted life years that it will give a patient, is no more than what it values a year of life in great health – £30,000 (about $44,820). So if you want a medical procedure that is expected to extend your life by four years but it costs $40,000 and bureaucrats decide that it will improve the quality of your life by 0.2 (death is zero, 1.0 is best possible health, and negative values can be assigned), you’re out of luck because $40,000 divided by 0.8 (4 X 0.2) is $50,000.

You read that correctly. Whether or not you get care – and what treatment you get – is based on a mathematical formula based on your expected life expectancy. In a government run system that offers no competition for services and almost no incentive to work in the system, this is what the operations managers must do to try to keep the services offered solvent.

Of course, their not doing a very good job with that either.

NICE’s job is to research and publish guidelines for health care professionals to help them determine if treatments are worth while – primarily determined by cost effectiveness.

Here’s a post from the Times Online discussing how NICE assesses a drug to see if it is worthwhile to administer to patients.

How does NICE assess drugs?
It works out how much the NHS must spend on them to achieve a defined benefit to patients. They are approved if they cost the NHS less than about £30,000 per quality adjusted life year (QALY).

That means for every £30,000 spent prescribing them, the benefit enjoyed by patients must add up to the equivalent of a single patient living an extra year of good-quality life.

How does it do it?
It often uses computer-based economic models designed by academics, which are fed with the trial data supplied by the companies and work out the cost per QALY. For Aricept the cost per QALY was between £50,000 and £90,000, depending on what assumptions were made about how it is used.

Does the use of the phrase computer-based economic models designed by academics make you feel all warm and fuzzy? Not.

One other example. (Note that I don’t remember all of the details) During a recent visit to Philadelphia, a friend from Canada had a mild heart attack. He was stabilized and had a couple of choices to make.

First, he needed to have the blockages cleared. He could go the cut-open-the-chest route or have the stents installed in a cath lab, a much less invasive procedure since they don’t cut your chest open. He also needed to decided if he was going to have the procedure in the United States or in Canada.

One thing that he told me was that if he did go back to Canada, they would cut him open and not go the cath lab route. He would not have a choice.

He stayed in Philadelphia for the procedure, was out of the hospital in days and has recovered. Luckily, he had health care insurance that covered him while he was traveling.

Be careful with what you hope for when it comes to “better and improved” health care. The change will not be what you expected.