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About Those Death Panels . . .

The very real threat of government health care rationing.

Jan 31, 2011, Vol. 16, No. 19 • By WESLEY J. SMITH
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Britain’s National Health Service (NHS) best illustrates the connection between stringent health care rationing and single-payer funding. Until very recently, the National Institute for Clinical and Health Excellence (NICE) determined what procedures—and which patients—would be covered by the NHS. (The new government in Britain is replacing NICE rationing with decisions made by general practitioners, creating the potential for conflicts of interest between physicians and their patients.)

In its heyday, NICE followed a complicated quality-of-life/cost-benefit formula to ration care, using a unit of measurement called the “quality adjusted life year,” or QALY. Briefly, the process of determining whether a given treatment would be covered involved determining how much time a procedure might give a patient, then subtracting for low quality of life. The resulting QALY estimate was then analyzed to determine whether the predicted benefit was worth the projected cost. Some Obama-care supporters—including the New England Journal of Medicine—want the United States to adopt a QALY system, raising the prospect of bringing the worst aspects of single-payer rationing to federally controlled private health insurance markets. 

Our current private system certainly has serious problems that need addressing. But no private insurance company would dare unilaterally deny a previously qualified patient life-saving surgery, as Arizona did. Only government can get away with something like that. 

Indeed, if insurance companies fail to pay for covered care, they risk juries’ awarding tens of millions in punitive damages against them in “bad faith” lawsuits—and there are plenty of trial lawyers eager to bring such cases. At the same time, government regulators of private systems are much more likely to side with patients than insurance companies, a benefit of the doubt likely to be reversed in single-payer or federally bureaucratized plans. Potential loss of market share serves to keep private carriers on the up and up—particularly in markets with robust competition, which is why expanding health insurance markets is an urgent agenda item for those seeking to replace Obamacare.

As the nation continues to debate health care reform, we should keep in mind that many Obamacare supporters see the Affordable Care Act as merely a first step on the road to a national single-payer plan. Those who oppose such a centralized system should stress that avoiding death-panel medicine in a time of strained budgets requires that we eschew both single-payer financing and federalized bureaucratic control. They should also promote cost-containment innovations, such as price competition at the source of services, and reforms that enable hard-to-insure people and workers with low wages to gain broader access to coverage or inexpensive care.

Wesley J. Smith is a senior fellow at the Discovery Institute’s Center on Human Exceptionalism.

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