More Central Planning: The Failed Panacea for Health Care Reform

A rebuttal to The New Republic's latest prescription for health care reform


Offering proposals to fix the American health care system has lately become a national pastime. In the June 9th issue of The New Republic, bioethicist Daniel Callahan and surgeon Sherwin Nuland enter the fray, prescribing massive doses of a familar and already failed nostrum: top-down central planning.

Callahan is the president emeritus of the Hastings Center bioethics think tank and author of many books including False Hopes: Why America's Quest for Perfect Health Is a Recipe for Failure, and Nuland is a retired clinical professor of surgery at Yale University and also a Hastings Center fellow. The two assert that the dire situation in which we find ourselves is the result of several mistaken assumptions: (1) "that medical advances are essentially unlimited" (2) "that none of the major lethal diseases is in theory incurable" and (3) "that progress is economically affordable if well managed."

Callahan and Nuland boldly (and pessimistically) declare that at the heart of our dysfunctional system is the fact that are "no imminent, much less foreseeable cures for the most common and most lethal diseases." Yet good news abounds: In May, the Centers for Disease Control and Prevention announced that average U.S. life expectancy has risen to an all time high of 78.2 years. In fact, age-adjusted death rates in the United States show that the risk of mortality at any given age have been declining substantially. In 1950, the death rate was 1,446 per 100,000, falling to 1,039 per 100,000 in 1980 and further to 741 per 100,000 in 2009. Age-adjusted rates show that, despite the fact that the U.S. population has been aging over the past half-century, the risk of mortality has actually fallen by half. 

The three biggest killers are diseases of the heart, cancer, and strokes, which account for nearly 60 percent of deaths in 2009. In 1950, 1980, and 2009, the death rates for heart disease were 587, 412, and 180 per 100,000 respectively. The cancer death rates in those same years were 194, 208, and 174 per 100,000. The rate death from strokes were 181, 96, and 39 per 100,000. (A good bit of the cancer death rate increase from 1950 to 1980 was the result of increased tobacco smoking. In 1965, 42 percent of U.S. adults smoked. Just around 20 percent do now.)

Americans still do die of infectious diseases, but nothing like they did in the past when the death rate for tuberculosis in 1900 was 194 per 100,000, which fell to 46 per 100,000 in 1940. The current TB death rate is 0.2 per 100,000, and the rate of tuberculosis infection fell to an all-time low in the U.S. of 3.6 per 100,000 last year. Even the U.S. death rate from HIV infections has fallen from 10.2 per 100,000 in 1990 to 3.7 in 2007.

Modern medicine cannot take all the credit for these declines in age-adjusted mortality. A recent study suggests that declines in risk factors such as smoking reduced heart disease rates more than medical interventions. Nevertheless, medical innovations have helped.

Cancer has been a much tougher nut to crack. The latest data shows that "overall cancer incidence rates decreased by approximately 1 percent per year" and that cancer mortality rates have been falling even faster at around 1.5 percent per year. It is good news that modern medicine has increased the five-year survival rates of cancer patients from 50 percent in the 1970s to 66 percent today.

As impressive as it is, all this good news doesn't satisfy Callahan and Nuland, who preempt such arguments by noting that "There are many ways of responding to this generally pessimistic reading of medical innovation in recent years. The most common is simply to note all the progress that has been made: useful new drugs, helpful new devices and technologies, decreased disability, better ways of controlling pain, and so on."

Instead, they focus on the negatives. And they aren't completely wrong to do so. Even as we live longer, we may be less healthy. Callahan and Nuland cite recent research by University of Southern California gerontologists Eileen M. Crimmins and Hiram Beltrán-Sánchez which finds no evidence for the compression of morbidity, i.e., the idea that people could be living longer healthier lives and dying after a short fast illness. The concern is that while we may live longer, we also suffer a longer period of disability before we shuffle off this mortal coil.

The analysis by Crimmins and Beltrán-Sánchez disturbingly finds that in 1998, a 20-year old male could expect to live another 45 years free of cardiovascular disease, cancer, or diabetes. They calculate a 20-year old male in 2006 could expect only 43.8 years free of one of those conditions. The numbers were similar for 20-year-old women whose expected years of life without serious disease fell from 49.2 years to 48 years. What's happening? The researchers suggest "the growing problem of lifelong obesity and increases in hypertension and high cholesterol among cohorts reaching old age are a sign that health may not be improving with each generation." Nevertheless, should be noted that Crimmins and Beltrán-Sánchez calculate that 20-year olds in 2006 can expect to live about a year longer than those who turned 20 in 1998.

In fact, University of Pennsylvania demographers Samuel Preston and Andrew Stokes estimate that higher obesity rates reduce U.S. life expectancy at age 50 by about a year and a half for women, by nearly two years for men, explaining a good bit of the difference between U.S. life expectancy rates and those of other developed countries.

We see a record of solid progress, but also some serious hurdles to overcome. Are Callahan and Nuland right to suggest that we are coming to the end of our therapeutic rope? I think not. The two men are correct that stem cell therapies and new treatments based on genomic science have been oversold. Nevertheless, the next biomedical revolution is just getting started. 

Just this week, hints of how the future will unfold were reported by leading journals including a much more effective new treatments for advanced melanoma, and a new preventative drug for breast cancer. Last year saw the development of a vaccine to treat prostate cancer. A new study recently found that retroviral therapies dramatically reduce the transmission of HIV and work continues on developing a vaccine against HIV. As antibiotic resistant strains of microbes develop, researchers are looking for new ways to target them and new ways to disarm them. Further down the road, RNAi (ribonucleic acid interference) might be used to treat heart failure, and stem cells to repair broken spinal cords. Successful treatments for obesity would shift the prospects for increased health in old age.

But Callahan and Nuland may grant that such treatments could be developed, and still remain convinced that something will break in our bodies in any case, resulting in (expensive) disease, disability, and inevitably death. The reply to their objection is clear: The only way to stay healthy is to prevent aging. Luckily, out on the horizon are possible therapies to do even that, including sirtuins and compounds that extend the ends of chromosomes, called telomeres. Biology is extremely complicated, but there seems to be no a priori reason why an engineering approach using increasingly sophisticated bioinformatics and experimental techniques cannot figure out how to repair diseased and damaged tissues and organs.

Based on the foregoing examples, the assumption that medical advances are unlimited and that none of the major diseases are in theory incurable seem reasonable to me. But what about the third assumption that Callahan and Nuland dismiss as implausible: that medical progress is economically affordable if well managed?

As evidence that medical progress is not affordable, Callahan and Nuland cite the now-standard litany of how health care costs are spiraling out of control, absorbing an ever larger fraction of our economy. They are right that such spending increases are not sustainable.

They have correctly identified the symptom—unsustainably rising costs—but missed the cause of the disease. Vast subsidies, increasingly administered by a system of centralized top-down management are the leading cause of American medicine's process of "destroying itself." Nobody in the system—not physicians, politicians, insurers, nor patients—has historically had any incentive to try to rein in spending on health care.

Callahan and Nuland perfer to see "a centrally directed and budgeted system, oversight in the use of new and old technologies, and price controls." They are like fiscal homeopaths in reverse. Instead of treating the patient with attenuated versions of the substance linked with an illness, they want to increase the dosage massively. If their prescription doesn't kill off American medicine, it will certainly end up killing a lot of patients. 

There is another way. One of the chief causes of our current health care malaise is the increasing centralization of the health care budget. In 1965, the health budget of the federal Department of Health Education and Welfare totaled $1.9 billion (about $14 billion in today's dollars). Then Congress approved legislation establishing Medicare and Medicaid whose costs have increased exponentially since then. Medicaid enrollment increased from 18 million Americans to 68 million now and costs state and federal governments nearly $400 billion last year. Similarly Medicare enrolled 19 million Americans at a cost of $10 billion. Today nearly 48 million Americans are receiving Medicare coverage at a cost of more than $500 billion. If government agencies were able to rein in health care costs, they have had nearly 50 years to prove it. So much for the effectiveness of centralized budgeting.

Government agencies have also never been much good at picking new technologies. In fact, there's pretty good evidence that health care industrial policy such as the federal certificate of need programs which limit health care capital and new technology expenditures have contributed to higher medical costs. And price controls have been a disaster everywhere they have been tried.

On the other hand, we do in fact know what works when it comes to restraining prices, encouraging innovation, and increasing consumer satisfaction—competition in markets. Markets are superb at gathering widely dispersed information and resources from millions of people and firms and then distilling that information into prices. Here's a partial list of what needs to be done: Allow physicians to sell their services in any form that they choose, as group members, health maintenance organizations, fee-for-service, etc. Nurses and other health care professionals should be encouraged to compete with physicians for primary care services. Insurers should be allowed to compete across state lines offering a wide variety of policies tailored to the perceived needs of various customers. Pharmaceutical and medical device manufacturers could be encouraged to work in tandem with physicians integrating the latest research findings quickly into therapeutic regimens without having to wait for the permission of hypercautious Food and Drug Administration bureaucrats. Consumers looking out for their own health and insurance needs would be vigilant about the costs and benefits of treatments, ensuring that medical progress remains economically affordable.

Callahan and Nuland are right that "the inadequate, inequitable, and financially insupportable system that has been jerry-built and constantly band-aided during recent decades will no longer do." It's way past time that the failed policy of centralized medicine be jettisoned entirely.

Ronald Bailey is Reason's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.