When Sen. Bernie Sanders makes his argument for single-payer health care, he often leans on the phrase cost-effective to describe his fix for America’s health care crisis. It came up four times in a recent op-ed he penned for Fortune magazine about the potential benefits of Medicare for all for small businesses; when he and Sen. Amy Klobuchar took on their colleagues Lindsey Graham and Bill Cassidy on CNN, hours after the latest Republican bid for repealing the Affordable Care Act collapsed, it was also on the tip of his tongue. Cost-effective had been featured elsewhere in his media blitz last month for the new Medicare-for-all bill, in an interview with the Huffington Post and in another op-ed for the New York Times.
In health policy, cost-effective is not just a useful adjective. To wonks, it alludes to the highly technical practice of cost-effectiveness analysis, which is what it sounds like—studies, normally conducted by health economists, evaluating both the relative costs and the therapeutic benefits of a drug or medical intervention. The costs can be an individual’s, an insurance carrier’s, a government’s, or even those borne by society as a whole. The therapeutic benefit, or “effectiveness” part, is usually measured in quality-adjusted life years, or QALYs, which assign utility scores to different states of health based on population surveys—a QALY of 1 represents a year of perfect health. Together, they form an incremental cost-effectiveness ratio, or an ICER, quantifying how much bang for the buck a choice in medicine or public health may have. The lower a choice’s ICER, the more cost-effective it is.
Strangely enough, cost-effective or cost-effectiveness analysis are nowhere to be seen in the Medicare-for-all bill. Given that virtually every country that offers universal health care to its citizens uses cost-effectiveness analysis to help decide what services to cover, it’s a curious omission, particularly because Sanders keeps talking about it. Many argue that its inclusion is one of the key drivers for reducing drug prices and slowing the growth of health care costs in countries with universal health care while still improving health outcomes. Across a string of health care systems that bear little resemblance to one another, cost-effectiveness analysis has enabled governments to better spend their health care dollars by creating a common marker to compare the trade-offs of funding a public health campaign, a preventive health screening, or a routine medical service.
To be clear, the United States has been down this road before, and still uses cost-effectiveness analysis in some capacity today. The Office of Technology Assessment, or OTA, from 1974 until 1995, applied it to problems posed by science, including in health care. Oregon used it to pare down benefits and expand its Medicaid program in the 1990s. In more recent years, Medicare has quietly used cost-effectiveness analysis for prioritizing prevention programs. And last month, the Department of Veterans Affairs announced that it will begin to consider cost-effectiveness analyses when deliberating over which drugs to add to its national formulary.
But there likely is a political calculus behind why Sanders and his colleagues left cost-effectiveness analysis out of their bill. In many cases, the decisions informed by these studies are noncontroversial—whether to fund a vaccine campaign against whooping cough, whether to screen all 65-year-olds for diabetes, regardless of their risk factors. But it could also include cases fraught with moral tension, like whether to continue daily hemodialysis for a 90-year-old man in poor health, or whether the same man should get a heart valve replacement for his aortic stenosis. And when those are sufficiently provocative, critics cry out that we may finally be on the verge of rationing health care.
It’s a smart, but cynical, strategy. Universal health care around the world is based on a premise few Americans are willing to admit—that only so much money can be spent on our health. Feeding into this fear, critics point to horror stories about waiting lists for knee replacements and doctor’s office visits in places like Canada, while a cottage industry housed within Fox News exists solely to construct spectacular lies about the National Institute for Health and Care Excellence, or NICE, in the U.K. NICE is a health technology assessment office that conducts economic studies and recommends different drugs or interventions to the National Health Service based on a “cost-effectiveness threshold” of about $40,000 per QALY gained—meaning they’re willing to spend $40K for each quality year of life gained. Contrary to popular belief, NICE is not a final arbiter of how health care dollars are spent in the U.K. The NHS routinely opts for policies recommended against by NICE on the basis of cost.
But when cost-effectiveness analysis and tools like it wander too close to affecting mainstream decisions about health care in the United States (i.e., Medicare treatment), public backlash ensues. In the past, this fear has been responsible for closing down the OTA and thwarting health reform in the 1990s as well as forcing Oregon to change allocation policies for its Medicaid program, ironically kicking thousands off of insurance. Today, it stops the U.S. Preventive Services Task Force from considering cost when making its recommendations. By leaving cost-effectiveness analysis out, perhaps Sanders and his fellow co-sponsors were looking to avoid a repeat of the rationing scares in 2009, when word of death panels threatened to sabotage the ACA. Palliating those concerns, that same law now further feeds into the rationing-industrial complex and actually bans the Patient-Centered Outcomes Research Institute it created from funding cost-effectiveness analyses to study health care delivery. On a dedicated page, its website states: “We don’t consider cost effectiveness to be an outcome of direct importance to patients.”
In too many ways, health care in America differs from its counterparts abroad. We still get worse health outcomes at higher cost. Yet it is in our fear of rationing health care where we truly diverge from the rest of the world in health policy. This fear is irrational for many reasons, but particularly because we already do ration health care, as I found out this summer, driving across Oklahoma and speaking to physicians and nurses about this issue. We just do it in more opaque ways. In an overworked emergency department, doctors ration their time; critical-access hospitals ration the few beds in their wards; transplant centers ration kidneys and livers through complex algorithms. Rationing happens by price, ZIP code, immigration status, stigma, and race, among other factors too.
The strange mix of how we each pay for health care adds yet another layer of rationing and profoundly shapes our experiences with it. Through historic legal commitments, our government facilitates health care (of wide ranging cost and quality) for Native Americans, veterans, active military personnel, our oldest, our poorest, and those afflicted with end-stage renal disease or HIV/AIDS. The rest of us, through accidents of history, get different forms of health insurance through our employers and schools. A few of us buy insurance policies for ourselves, and many of us go without it, precariously relying upon courses of self-medication, Googling our symptoms, or visiting urgent care centers and emergency rooms when our health takes a turn for the worst.
Universal health care, in any mold, could help smooth over these stark differences. But if Democrats are serious about making their latest vision to achieve this a reality in some distant future, they ought to embrace the conversation of rationing health care in the United States, rather than cower away from it. Fair and transparent tools like cost-effectiveness analysis, though imperfect, are far more just than the sheer complexity of our current system. And there are ways to make these tools uniquely more American. Supporters of Medicare for all could propose using a higher cost-effectiveness threshold than what’s used in the U.K., allowing for more treatments to be covered. Co-sponsors of the bill could work to include questionnaires, embedded within the American Community Survey or within the next census in 2020, which make QALY measures more precise. Rules could be enforced to ensure that doctors and their patients, concerned about fears related to “cookbook medicine,” have multiple treatment choices covered by Medicare for all when faced with a given diagnosis. And citizen committees could provide input on what to prioritize in our health care system, like we’ve already done for some areas of disaster medicine policy.
Our country right now is grappling with the question of whether health care should be a right, rather than a privilege as it has been in the past. But Medicare for all doesn’t give a serious answer to the question that naturally comes next—what services should be a right? A doctor working for the VA, whom I spoke with earlier this summer, compared possible lines in the sand to modes of transportation. “Not everyone can get a Bentley, but people are entitled to more than a bicycle.”
Cost-effectiveness analyses in health care, conducted by apolitical bodies similar to our Government Accountability Office, have helped other countries strike a balance between Bentleys and bikes with an objective purpose. Unfortunately, it is easy to imagine a Medicare for all, if enacted as it is currently written, that will make my future decisions, as a physician in the clinic, suddenly become much more political. Instead of picking a beta blocker best suited for my hypertensive patient on clinical terms, I may be forced to choose one from a limited formulary influenced by Pfizer’s generous lobbying efforts in Washington. The details for hospital protocols for sepsis and clinical management of Type 2 diabetes could be hashed out by Congress—the same Congress that let CHIP, a popular bipartisan program, expire over this month for the first time since it was created. Is that a system that supporters of the bill really want?
Enacting Medicare for all without tools like cost-effectiveness analysis would be like flying an airplane with no fuel gauge on the dash. Gravity, air resistance, and Newton’s third law will make sure that, somewhere along the way, we’ll run out of fuel. When we do, we’ll finally have to confront our fear and find a better way.
