Provenge (commercial name for sipuleucel-T) is a new cellular immunotherapy for prostate cancer. It was approved by the FDA in April of 2010. The Centers for Medicare and Medicaid Services (CMS), the government agency responsible for administering Medicare, initiated a review of the FDA’s approval in June of 2010, approving payment for the treatment in the interim. Its final decision on the matter is expected in June of this year. Each treatment costs $31,000, and the usual course requires three treatments. The FDA approved the drug based on a clinical trial that lengthened life by a median of 4.1 months, with fewer side effects than docetaxel, an alternative therapy. According to the New England Journal of Medicine, the re-review of Provenge by the CMS is unusual, but not surprising, considering that the two agencies have conflicting priorities. The FDA is tasked with determining whether a drug or treatment is any good at its intended use. The CMS must take account of the cost-benefit ratio for a drug or treatment relative to other possible treatments when deciding on whether it should be approved for reimbursement.
The case for and against Provenge as a government-approved and subsidized therapy for prostate cancer succinctly captures the issues nesting at the core of the political budget imbroglio so far as it concerns health care. Extremely expensive therapies like Provenge that are only expected to extend life by a few months, if at all, force the question that must be asked if there is to be any hope for preventing Medicare and Medicaid from bankrupting the government fisc: How much money is continued existence worth? Or, more poignantly, how much money per day should society pay to extend the lives of one of the individuals within it? At $93,000, the expected 4.1 month extension of life that Provenge provides would cost roughly $750 per day. So far as Provenge is concerned, is the value returned to society for having kept someone alive for an extra four months worth more than the $750 per day it cost to do it? This is the crux of the issue with health care that is subsidized and paid by the state (i.e., in this case, the federal government).
But wait you object–how can a price be put on anyone’s life? Such a sentiment is emotionally appealing. It satisfies the heart to pretend that everyone’s life, like in a Mastercard commercial, is priceless, but that can’t possibly be the case, at least so far as society is concerned. Even the richest society in the world does not have unlimited resources for keeping a person alive a bit longer, no matter the cost. Grandpa’s family may claim that Grandpa’s continued existence is priceless, but perhaps only when Grandpa’s family is not paying the bills to keep him alive. Turn the question around: Would you, who claim the continuation of Grandpa’s physical existence on earth is priceless, be willing to pay out of your own pocket for a medical treatment that costs $750 for each day of continued existence? Would you be willing to mortgage your house, forfeit your inheritance, etc., to see that Grandpa gets another four months? If you wouldn’t be willing to do it, then why should society be so inclined?
Truthfully, the greatest threat to the republic is not to be found living in caves in Eastern Pakistan. The greatest threat to the republic is the confluence of costly technological innovations in medicine with socialized payment for medical care amid the utterly materialistic bent of society.
Technological innovations in medicine seem limitless. Something similar to a Moore’s law in medicine would be that our ability to treat illness and disease through pharmacological and treatment innovations doubles every decade or so. Unlike information technology that is nearing the quantum limits of the information a silicon chip can efficiently process, medical science has only begun to scratch the surface in understanding the human body. Vast tracts of the body remain as mysterious as the deep ocean trenches or the dark side of the moon once were. As more information is gained, as more cause and effect relationships are ascertained, the cost for developing new technologies for treating disease should decline. But today the cost is enormous because it is such a hit and miss proposition. We are so utterly ignorant of the biological processes governing the operation of the human body that developing a new treatment or drug is more speculative than drilling for oil without a geologic survey.
Society, through government and agency grants (e.g., the National Institutes of Health), funds a great deal of the exploratory work. But private industry funds the exploitation of information gleaned by the explorers, and reaps the windfall when they are proved to have a successful exploitation strategy. In an ironic twist, they then rely on the same society that funded the initial gathering of information to compensate them for the successful therapies thereby developed. Going further, they rely on a government-protected monopoly (patent protection) to ensure the viability of their profit windfall.
Yet, while technological innovations will inevitably continue, it is not clearly the case that the method of achieving them must necessarily continue unchanged. Drug companies exist to exploit the sliver of profitable space in the drug development process, yet research into the human body is a decidedly (and justifiably) communistic affair–the efforts of a few benefit everyone. The cost of technological innovations in medicine could likely be contained, somewhat, by heavy governmental funding of primary research that is then required to be entered and remains in the public domain. Greatly shortening the duration and breadth of patent protection could also substantially reduce costs. If drug companies became mostly drug-producing factories, without any protected monopoly position, costs would inevitably decline.
Free-market types would howl that such a system would eliminate the incentive for companies to develop new drugs and therapies. Which it may somewhat, at least for private enterprise. But private enterprise exploiting economic profits is a johnny-come-lately aspect of drug and therapy developments. The greatest developments in medicine had as their only profit motive the betterment of the human condition. When asked about who owned the patent for the vaccine against polio that he had developed, Jonas Salk responded, “There is no patent. Could you patent the sun?” Remember that the Salk vaccine is only about sixty-five years old. It has saved literally millions from the crippling effects of polio. There was a time in our not-so-distant past when value was measured through metrics other than just money.
Whereas research into the biological processes of the human body should be communitarian because each individual in the community is a possible beneficiary of the efforts of a few, the care of any individual body is not. The most effective care of any asset is accomplished when responsibility is delegated to the entity with the greatest stake in its preservation. The entity with the greatest stake in preserving the asset that is the human body is the soul inhabiting it. Socialization of the costs of caring for the human body is dangerous because it ameliorates the responsibility of the one most concerned with its care. Insurance always creates moral hazard, i.e., the incentives for risky behavior always increases when the losses that might accrue are indemnified through a policy of insurance. Insuring the soul inhabiting a human body against the body’s failure creates the incentive for risky behaviors (e.g., smoking, tanning bed usage, overeating, drinking, etc.) that increases the insurer’s liability and costs. When the insurer is society at large, as is the case with socialized health care, and the society is repulsed at taking actions to deter risky health habits as an infringement on freedom, the cost of blanketing with insurance coverage the health of individuals will be exorbitantly high. It will be even higher when society is forced to pay for every technological development regardless of its cost that might benefit in some small measure the level of health an individual might enjoy—even technological innovations designed to ameliorate the effects of the individual’s risky behavior– and even more so when payment for each such successful innovation must fund several hundred more that were not.
The vulgar materialism of American culture does not help. Americans have grown to believe it their manifest right to have any and all of their material needs, and a great many of their wants, instantly gratified. Materialism is a species of worship, and all forms of worship are ultimately concerned with death. Materialism tries to escape the contemplation of death by satiation in the here and now. A culture so devoted to materialistic concerns necessarily believes that death is to be avoided at any cost, and finds expression of that belief readily available when the cost of staying alive is borne by the society at large. The baby-boomer generation that is now entering the dying years no doubt expects no expense to be spared in continuing their existence here on earth. They by and large lived their lives denying any limits to their appetites. Why should anyone expect anything different of them in death?
Given the expense of technological innovations in medicine, the socialization of health care costs, and the rampant materialism afflicting the culture, health care is a slow-motion fiscal train wreck. Ironically, the purported party of limited government (i.e., the Republicans), with a constituency that is older and whiter than the Democrats, will be the one that howls the loudest about their right to have unfettered access to the most expensive and least effective treatments. It’s not for nothing that Sarah Palin was able to score political points by describing the new health insurance law as containing provisions for “death panels”.
But something akin to death panels is exactly what will be required if health care is to remain and become increasingly socialized. Somebody has to ask the question: Is it worth $90,000 to keep an old man alive for another four months? If the old man or his family doesn’t have to answer it because of socialized medicine, then the society must. Refusing to do so will soon enough mean that the question is irrelevant. The money to pay for the old man to live another four months won’t be there to spend.