Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.forbes From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: INSIGHT SCIENCE & TECHNOLOGY Date: Wed, 18 Nov 92 14:52:03 EST Message-ID: "Copyright 1992 Forbes, Inc. Any further reproduction or redistribution without the express written permission of Forbes and ACC is prohibited." INSIGHT SCIENCE & TECHNOLOGY Medical budget fantasies COMMENTARY BY PETER HUBER Peter Huber, a senior fellow of the Manhattan Institute, is the author of Galileo's Revenge: Junk Science in the Courtroom (Basic Books). THEY CALL IT liposuction. The surgi- cal vacuum cleaner goes in, the fat comes out. The before-and-after pic- tures are astonishing. Down the hall, the hot health care fad is the ''global budget,'' whereby the government will pay all medical bills, cap total spending and make sure that everyone gets looked after the same. Our obese health care system, it is said, will soon be young and trim again. The global-budget weight-loss program relies on demand-side man- agement of medical costs. The sole consumer of medical services--the government, that is--just won't pay as much as individuals or private in- surers now do. And the consumer-- that's the government again--just won't buy some kinds of services at all. Oregon's ambitious proposal to reform its Medicaid program provides a preview. The plan ranks 709 medical conditions and treatments in terms of their costs and benefits, and pays only for the top 587 conditions. A 19- ounce premature baby would get ex- tensive life support services, but a 17- ounce preemie wouldn't. Is anything wrong with this? The feds rejected Oregon's plan on the ground that it discriminates against some kinds of disabilities, but that is hardly a compelling objection. Every purchasing decision involves dis- crimination of some kind, and if bills are going to be paid wholesale, then the discrimination is bound to be equally sweeping. Call it lipophobia if you like, call it discrimination against the calorically challenged--but when the global budget arrives, the U.S. Treasury just isn't going to be paying for liposuction. Equally evident is that the lipoplas- tic surgeons are going to prosper re- gardless, as they already do without any insurance reimbursement at all. Lipoplasty may seem frivolous, but it illustrates a fundamental point. A steadily growing fraction of our medi- cal spending involves essentially elec- tive procedures. And that, in an over- simplified way, is why talk of a global medical budget is just so much high- cholesterol baloney. To begin with, we are spending more and more souping up the hu- man machine to perform beyond (or, in any event, differently from) original specifications. Steroids, vaccines, contraceptives, eyeglasses, gene ther- apy, growth hormones, breast im- plants, hair removal, nose jobs and surgery to correct congenitally cleft palates are all human equivalents of stock car racing. The whole point is not to fix what got broken, but to improve the performance of what came off the dealer's lot. You may approve of childhood vaccines, say, and disdain breast implants, but that's beside the point. There's market de- mand for both, and money will be spent on both whether some global- budget clinocrat likes them or not. The same is true at the other end of the spectrum, when it comes to repairing what used to be irrepara- ble. Medical grease jockeys already supply us with metal knees, porce- lain teeth, plastic eye lenses, synthet- ic hormones, hair transplants, kid- ney transplants and artificial heart valves. Every year there is going to be more supply of this sort of thing, and more demand, so long as any vestigaes of a free market survive. To be sure, government can define some minimum cluster of health care services--a bestselling 587, say--to which even the indigent will be given access. But the idea that total spend- ing can somehow be capped, or that truly equal treatment will ever be delivered to rich and poor alike, is fantasy. The government may start with a very generous baseline mini- mum in 1993--a top 709, say--but wherever the starting line, technology will march forward from there. Before long, as has happened in every coun- try that has tried such schemes, one of two things will occur. Either the no- tion of a prescribed global budget will be jettisoned, and government will increase spending at whatever rate technological advance dictates. Or citizens will gradually spend more and more out of their own pockets for heart transplants, cataract surgery and other lifesaving therapies, useful fixes or medical frivolities that bureaucrats choose not to fund. Either way, the global budget disappears. Of course, private insurers encoun- ter somewhat similar problems. A typical private insurance policy con- tains pages of fine print explaining why a nose job is different from cleft palate surgery, at least if you're a woman heading for Hollywood rath- er than a hockey player bloodied on the job as defined under section W, subpart G-1.17...you know the rou- tine. But the one big advantage is that when private insurers compose that sort of prose, they always have to watch out for what the competition is offering. The people who draw the endlessly shifting lines between what can be collectivized efficiently and what can't are at least subject to some steady market discipline. And no time at all is wasted daydreaming about global budgets. An uninsured English monarch who found his health threatened by a battle-ax once offered his entire king- dom for a horse. As we age and sicken, most of us will harbor spendthrift thoughts of that kind sooner or later, and if we are left with any shred of freedom, we're going to act on them in varying degrees. The idea that the government of a free people can effec- tively cap what we collectively spend pursuing life itself is pure lard.  "This information is the property of Forbes, Inc., ACC takes no responsibility for its content, or the actions of any individual or institution, predicated on the information herin. Forbes Subscriptions are available to students and faculty members at the student/educator rate of $33 for one year, 27 issues. 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