Wednesday, July 15, 2009

Virginia Postrel's First-Hand Experience with Serious Medicine

Virginia Postrel, the well-known libertarian thinker and writer, confronts some of the issues of Serious Medicine in her intense piece in The Dallas Morning News. As she says, in New Zealand, they spend less, and they get less:

Consider New Zealand. There, a government agency called Pharmac evaluates the efficacy of new drugs, decides which drugs are cost-effective and negotiates the prices to be paid by the national health care system. These functions are separate in most countries, but thanks to this integrated approach, Pharmac has indeed tamed the national drug budget. New Zealand spent $303 per capita on drugs in 2006, compared with $843 in the United States. Unfortunately for patients, Pharmac gets those impressive results by saying no to new treatments.

The American approach is better, she concludes.

The good thing about a decentralized, largely private system like ours is that health care constantly gets weighed against everything else in the economy. No single authority has to decide whether 15 percent or 20 percent or 25 percent is the "right" amount of GDP to spend on health care, just as no single authority has to decide how much to spend on food or clothing or entertainment. Different individuals and organizations can make different trade-offs. Centralized systems, by contrast, have one health budget. This treatment gets funded, and that one doesn't.

If I lived in New Zealand, I wouldn't be dead, just a lot poorer. But if every place were like New Zealand, far fewer complex new drugs would get developed in the first place. And my odds of survival would be much, much lower.

Of course, the American system could be improved further, with more commitment to tackling Serious Illness with Serious Medicine.

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