Thinking Rationally About Rationing

Last month, the U.S. Preventive Services Task Force revised its guideline on mammograms, advising that women should wait until age 50 to get one. Last year, the same organization made a similar recommendation for prostate cancer screening in men — namely, that men 75 years and older should not get screened.

A recent article in the Wall Street Journal explains the group’s reasoning:

The task force said the new guidelines strike a better balance between the benefits of early cancer detection and the unnecessary anxiety and extra costs associated with false positives, which sometimes result from the tests.

The task force is doing the responsible thing, in my opinion. When we spend taxpayer dollars on keeping people alive, we should perform cost-benefit analyses like we would for any other transaction. If the amount that the United States would spend on nationwide testing is greater than the societal benefit that such testing brings, then it shouldn’t provide the funding. Medical services like prostate cancer screening and mammograms have more societal cost than societal benefit. The tests result in false positives, unnecessary anxiety, and overtreatment. According to an analysis published in the Journal of the National Cancer Institute, between 1986 and 2005, widespread prostate cancer screening resulted in 1.3 million additional diagnoses, but only 56,000 deaths were prevented.

This reminds me of an episode of This American Life that I heard in October, “More is Less,” that explored why costs are rising in the American health care system. In “Act Two. Every CAT Scan has Nine Lives,” it proposes that patients are responsible for rising costs because they demand more tests than is socially optimal. When the government gets involved, doctors can effectively forget about the idea of consulting with their patients in accordance to their individual needs and to make decisions. (The Show-Me Institute study by Arduin, Laffer & Moore Econometrics, “The Prognosis for National Health Insurance: A Missouri Perspective,” communicated this same concept: Patients will over-consume health care services when they are removed from the transaction — i.e., the health care “wedge.”)

Taxpayers should want the United States to perform these cost-benefit analyses; otherwise, their money is spent thoughtlessly and irresponsibly. The United States spends literally billions of tax dollars on end-of-life care for non-productive octogenarians, during which time they do little besides collect additional Social Security checks. Researchers at the Dartmouth Institute for Health Policy and Clinical Practice discovered that total Medicare spending during the last two years of life ranges from an average of $53,432 per patient at the Mayo Clinic in Rochester, Minn., to $93,842 at U.C.L.A. Medical Center. Approximately 27 percent of Medicare’s annual $327 billion budget is spent on patients in their final year of life.

That’s $88.29 billion! That’s 0.6 percent of GDP! That’s 19.4 percent of the budget deficit!

The United States would see a greater return on investment if it gave that money back to taxpayers, or spent it on alternative health care services, such as buying prenatal vitamins for low-income populations.

Paranthetically, I want to point out that the guidelines issued by the U.S. Preventive Services Task Force are normative and non-binding. The panel isn’t banning anything. A person can get a mammogram or a PSA test at any age if she or he has both the desire and the ability to pay for them, either via insurance or out of pocket.