The U.S. health care system is rife with rising costs and stagnating quality. All too often, the cure for these ailments calls for ever greater government intervention. Such cures misdiagnose the problem. The health care system's problems are caused by too little patient control, not too little government intervention.
Consider that in 1960, the private sector funded more than three-quarters of the nation's health care expenditures. Patients paid nearly one-half of the total national health care expenditures through out-of-pocket expenditures. Today, the private sector pays for less than half of the $2.6 trillion in health care spending, and only a bit more than $1 out of every $10 is funded by patients through out-of-pocket expenditures.
Reduced patient control takes critical health care decisions away from the patient and gives it to government bureaucrats. Along with other adverse consequences, such as skyrocketing health care inflation, reduced patient control leads to a less responsive, more rigid medical system. The current issue surrounding early detection tests for Alzheimer's exemplifies this problem.
Alzheimer's is a terrifying disease whose costs and prevalence is growing. According to the Alzheimer's Association, Alzheimer's is the sixth-leading cause of death in the United States. The total financial cost created by Alzheimer's is more expensive than any other disease — even cancer and heart disease, which are the leading causes of death in the nation.
These financial costs pale next to the costs in terms of emotional pain and suffering. The emotional costs were personified by Ashley Campbell, whose father, country singer Glenn Campbell, has Alzheimer's, in her April 24 testimony before the Senate Special Committee on Aging supporting the administration's National Plan to Address Alzheimer's Disease.
In aggregate, the direct costs to manage Alzheimer's and other forms of dementia (payments for medicines, nursing homes and other care expenditures) are $109 billion a year, according to a new Rand Corp. study. Including the indirect costs, such as the informal care provided by family members, the Rand report estimates Alzheimer's total costs to be between $157 billion and $215 billion. For perspective, the comparable costs for cancer and heart disease are $77 billion and $102 billion, respectively.
While there is no cure for Alzheimer's, many medical professionals think that early detection is valuable. Early detection may help slow the progression of the disease by enabling earlier access to appropriate treatments. Early detection also empowers families to plan for the disease more effectively and enroll in clinical trials should they choose that option.
In fact, public health experts consistently extol the value of early detection for diseases such as breast cancer, prostate cancer and heart disease. Because of early detections of cancer and heart disease, millions of lives have been saved, and in many instances early detection ultimately saves money as well, by avoiding costlier and more invasive procedures necessary when the condition goes untreated.
Despite the widely held belief that early detection has medical value, current Medicare rules generally deny payment for positron emission tomography (PET) scan technologies that could be used to detect early signs of Alzheimer's or other forms of dementia. Such restrictions would be inconceivable for early-detection technologies used for patients deemed high risk for cancer or heart disease.
The Medicare rule is justified by some doctors who do not think there is sufficient evidence that PET scan technologies improve health outcomes. However, concerns have been raised that these rules denying payment are themselves raising Medicare costs and that savings could result if more widespread use of the PET technology is approved. This brings us back to the problem of declining patient control.
By 2050, the Alzheimer's Association estimates that 16 million Americans will be afflicted with some form of dementia. Effectively managing (and ultimately curing) these diseases require multiple approaches. This process is enhanced when patients and doctors are empowered to create the treatment plan they think is most effective, including early diagnosis with PET technology. Only through the use of multiple approaches rather than blanket pronouncements from Medicare panels will the ultimate value of PET technology be ascertained.
As government's control over the health care system expands, by necessity, medical policies become dictated by broad, sweeping generalizations. These policies ultimately create a rigid medical system that lacks innovation and personalization, and is subject to arbitrary restrictions in order to control costs. The value of PET scans and early Alzheimer's detection exemplifies this problem. The answer is to reverse the decades-long march toward government control and empower patients to manage their own health outcomes.
Wayne Winegarden is a senior fellow at the Pacific Research Institute and a contributing editor to EconoSTATS at George Mason University.