The Heart of the Matter– Cost effectiveness

Ewe Reinhardt’s Economix blog today looks at pricing human life and the choices we face.

“All modern health systems now offer some medical interventions associated with very high costs per QALY. These procedures present two morally vexing questions:”

“1. Is there a maximum price per quality-adjusted life year (or life-month or life-day) beyond which society will not buy additional QALYs from the health system – certainly not out of collective insurance funds, be they public or private? Or is the sky really the limit in health care, as it is not in any other economic sector? “

2. If there is a maximum price, should it be the same for all members of society – rich or poor, prominent or not – or should there be different maximum prices for different socioeconomic classes? For example, should QALYs be rationed by market price and the individual’s ability to pay, as it would be in a free-market economy?”

Medicynical note: The point of Reinhardt’s blog is how much are we willing to pay. In the article there is a curve showing a QALY supply curve. On it there are points representing the effect of drugs costing $100,000/year on survival.

I’m not sure that any $100,000/year and more drug represents a cost effective intervention. Aren’t single drugs priced at more than the median and average income in our country by definition, cost-inefficient? And beyond most individual’s, and insurer’s ability to pay?

Abuse of the patent privilege is a real problem. Companies take the patent as a right to price medical advances higher if they treat life-threatening problems.

How did we let this happen?

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