"What Price is Life?"

Ten years ago, the British government created the National Institute for Clinical Excellence (NICE) to evaluate the cost/benefit ratio of new medical treatments, especially the costs versus the benefits of pharmaceuticals. Thus government bureaucrats decide whether or not patients should have access to new drugs. This is explicit government rationing. And why not? After all, why should taxpayers be on the hook for costly treatments that may boost a patient's life expectancy by only a few months? 

As the New York Times explains:

When Bruce Hardy's kidney cancer spread to his lung, his doctor recommended an expensive new pill from Pfizer. But Mr. Hardy is British, and the British health authorities refused to buy the medicine. His wife has been distraught.

"Everybody should be allowed to have as much life as they can," Joy Hardy said in the couple's modest home outside London.

If the Hardys lived in the United States or just about any European country other than Britain, Mr. Hardy would most likely get the drug, although he might have to pay part of the cost. A clinical trial showed that the pill, called Sutent, delays cancer progression for six months at an estimated treatment cost of $54,000.

But at that price, Mr. Hardy's life is not worth prolonging, according to a British government agency, the National Institute for Health and Clinical Excellence. The institute, known as NICE, has decided that Britain, except in rare cases, can afford only £15,000, or about $22,750, to save six months of a citizen's life…

…the decisions that get the most attention are those involving new drugs. Any drug that provides an extra six months of good-quality life for £10,000 - about $15,150 - or less is automatically approved, while those that give six months for $22,750 or less might get approved. More expensive medicines have been approved only rarely. The spending limits represent the health institute's best guess for how much the nation can afford….

 "It's hard to know that there is something out there that could help but they're saying you can't have it because of cost," said Ms. Hardy, who now speaks for her husband of 45 years. "What price is life?"

Some will object that the U.S. already engages in rationing. After all, private health insurance companies limit access to certain drugs or limit the amount they will pay for treatments. In fact, as health care costs escalate, our dysfunctional employment-based health insurance system encourages employers to find the cheapest one-size-fit-all policies for their employees.

A better system would allow people to purchase health insurance policies that reflect their own evaluation of how much an extra bit of life should cost. Some may choose gold-plated policies that pay for nearly any new treatment. Others may decide that it is more important to save money to give to their heirs than to try to purchase a few extra months of life that an expensive policy might provide. In other words, the "rationing" decision would made by individuals rather than by bureaucratic boards eager to protect the pocket books of taxpayers. 

However, with the creation of the Medicare prescription drug program, such bureaucratic rationing is probably inevitable in the U.S.