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A look at the reality of Universal health care December 23, 2007

Posted by The Armchair Economist in 2008 Election, Health Care, Medicine, Politics, Ron Paul.

When it comes down to a persons life, it is easy to make a knee jerk reaction and blame it on the insurance company. If you’ve read some of my older posts, you should be familiar with my stance on why for profit insurance companies are a inherently flawed concept. However, the recent case of Nataline Sarkisyan illustrates the reality of resource management that would be necessary under a universal payer system of health care.

A 17-year-old died just hours after her health insurance company reversed its decision not to pay for a liver transplant that doctors said the girl needed.

Nataline Sarkisyan died Thursday night at about 6 p.m. at University of California, Los Angeles, Medical Center. She had been in a vegetative state for weeks, said her mother, Hilda.

“She passed away, and the insurance (company) is responsible for this,” she said.

“They took my daughter away from me,” said Nataline’s father, Krikor, who appeared at a news conference Friday with his 21-year-old son, Bedros. more on this case here

It is easy to automatically point the finger at the insurance company and blame them for the death of the girl. However, there are several considerations we need to think about. The primary issue being, would a liver transplant have saved her life? I do not have access to her medical records so the only thing I can do is postulate. In this case, the patient had leukemia and complications arose from a bone marrow transplant. She was already in a vegetative state for several weeks prior to the surgery. Would a new liver have improved her life in any significant manner? The insurance company originally denied her liver transplant based on the absence of any evidence that a liver transplant would improve her condition (The current trend in health care is something called “Evidence Based Medicine”, where treatment is only rendered if it is shown in clinical studies to therpeutic). In the absence of any evidence that this would prove therapeutic, should insurance companies be forced to pay? The alternative view is that the patient’s doctor felt that the liver transplant was necessary, so the question arises, is the doctor or the insurance company responsible for making medical decisions? One argument can be made that although the insurance company refused to pay for the operation, the doctors had a responsibility to give the transplant to the patient regardless if they will be reimbursed (this is consistent with how medical malpractice decisions have been rendered in recent cases). I would not be surprised if the patients family or insurance company brought up point in the ensuing lawsuit, but this is a whole other blog.

As a response,

John Edwards tonight cited the case of a 17-year-old California girl who died after her insurance company refused coverage on a liver transplant to save her life as a call to action to change the current system of healthcare in America.
“Are you telling me that we’re gonna sit at a table and negotiate with those people?” asked a visibly angered Edwards, challenging the health care companies. “We’re gonna take their power away and we’re not gonna have this kind of problem again.” More here

Why is this case relevant to national health care? John Edward’s platform on health care (as with the other Dems) is to transform America’s health care system and provide universal health care for every man, woman and child in America (cited directly from his candidacy webpage).

In any type of universal health care, there are limited resources and tough decisions need to be made on who deserves to use these resources. For all the ills of insurance companies, there is still one thing that they do well: manage resources. In this case, Cigna (the insurance company in this case) is a perfect metaphor for a national payer in universal health care. For example, should more money be devoted to treatment of cancer in a 65 year old patient who has smoked 2 packs of cigarettes a day for 40 years, or for preventative health care for a 6 month old infant? Consider the fact that one major limitation of organ donation is the dearth in supply of organs relative to demand of organs. According to the OPTN, there are 16,679 patients on the Liver Transplant waiting list (Source). Where a liver is so highly valued, should the liver be used on this particular patient where the outcome is uncertain.. or should the liver be used in someone with a diagnosis that is expected to have a more proven outcome?

These might seem like preposterously extreme decisions, but in universal health care rules will need to be made to clearly delineate who should and should not receive care. In this case I am confident enough to bet my degree that in a universal health care setting, that this patient would NOT have gotten her liver transplant.

While it is noble to want to give everyone in the country free health care, one needs to understand the ramifications of universal health care on an individuals choice and true effect on quality of health care. digg story


1. gmcfly - December 24, 2007

I think you’re confusing universal health insurance with a single-payer insurance system. Edwards’s health plan is not a national single-payer system, but rather a combination of employer mandate (employers are required to provide insurance) and individual mandate (individuals must have health insurance).

Another point I want to make is that, although a private insurance company and a national health insurance plan both have the power to deny treatments by denying reimbursements, the private insurer is also thinking about profits and investors, advertising, and many other expenses unrelated to providing health care. So they would be under more financial pressure, and probably deny more liver transplants, than a national plan.

This is already happening to many people in the U.S. who are unable to buy individual health insurance because of “preexisting conditions.” The sickest are left in the lurch.

2. Joy - December 26, 2007

I lived in Europe for a while where they had national healthcare (I was not personally covered). It was not well liked–they complained about how coverage kept decreasing on things. Just making ends meet was very hard for them and at least one friend told me they could not possibly afford to have as many kids as they wanted (more than 2). Their population is dropping drastically b/c of the low birthrates and I wonder if it’s partly due to high cost of living. About 50% of income goes to the government! Not what I want here.

3. The Armchair Economist - December 28, 2007

gmcfly – I apologize for my mistake with saying Edwards plan for universal healthcare equates to a single payer system. True it will be a mix of private and public payers, but the fact remains that there will be limited resources and a line will need to be drawn to determine who deserves these resources from those that do not.

Also, by my statement “For all the ills of insurance companies, there is still one thing that they do well: manage resources.” my implication was that they are good at managing their money to ensure maximal profits and minimal expenses, usually with nearly bulletproof arguments in case they need to defend their decisions in the court of law. (ie: there are no studies that show that therapy A (the more expensive one) is more effective than therapy B (usually the cheaper one), so they cannot be held liable for not paying for the more expensive therapy.

4. The Armchair Economist - December 28, 2007

joy – thanks for sharing your insights, I’ve heard similar anecdotes from people living in countries with socialized health care but the people where I end up debating on the merits of socialized health care refuse to believe in the simple concept of supply/demand disequilibrium

5. henrietta Okopie - March 6, 2008

i really do not think the Insurance should determine, whose case is more important and not, for one reason that they take their premium monthly in regardless of who is paying it. and secondly, i strongly do not feel that unversal health care should put a rule to who should get it or not. for instance in your example of the 65 years old man and the young infants, i feel if it is universal health care both patient should be given a chance to leave, and not be judgemental about their treatment, as long as they still have live. the main purpose of universal health care is to give hope and live to the despires. the opening story was very partentic, but really i would blame the Doctors, the insurance, and the height of it the government of America. America the big great country, and yet the citizen are dying of medical malpractices mostly for lack of insurance. in Africa at least you are sure of good care at the hospital if you’ve got the money. but in houston TX of USA, even with your money and no insurance you are not sure of getting the right diagnoses. this is really bad.

6. Jeff - July 6, 2008

There seems to be a misconception that Universal Health Care = unlimited health care for everyone. This just cannot happen with finite resources. There has to be limits, or the system will not function. There really is not that much difference in approach between a single-payor government system and a private insurance company.

Yes, a for-profit is in the business of making a profit, and will make decisions with this in consideration. But a government system needs to supply services to a whole lot more people, with many of them not paying for these services, AND this system will have much more in the way of administrative costs (bureaucracy). In effect, BOTH will be making treatment decisions based on available resources to fund these treatments.

The current US healthcare system problems originate from a number of reasons: it has artificially inflated prices, so that those with insurance subsidize those either with government insurance or no insurance (in addition to paying a 2nd time in the form of taxes); the risk of litigation causes doctors to practice defensive medicine, and order tests that are unnecessary; many patients have an “entitlement attitude”, in that they feel that since they or their employer pays for their insurance, they are entitled to expensive tests and medications, rather than less expensive yet adequate alternatives; etc., etc., etc.

7. The Armchair Economist - July 6, 2008

Jeff- I agree with all of what you said, except for ‘those with insurance subsidize those either with government insurance or no insurance’. I don’t mean to split hairs, but with the exception of the argument that ‘without someone paying for these services, the infrastructure wouldn’t exist’, the amount going to the uninsured or to Medicaid/Medicare doesn’t change depending on your insurance status.. (ie: You/your insurance isn’t giving money to pay for care for the uninsured).. the amount going to fund Medicaid/Medicare is paid by you and me regardless of our insurance status.

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