Thursday, 5 July 2007

Rationed health care is hardly health care at all

The Government won't fund Herceptin, a an early-stage drug for breast cancer that has saved lives overseas. It won't fund Gardasil, a vaccine for cervical cancer that promises to save the lives of hundreds of NZ women every year. Hospital waiting lists get ever longer, and hospital salaries here less and less attractive compared to what can be earned elsewhere.

Lives are being lost, and the people who are saving lives are not being given the tools to do the job. Such is the result of the rationing of health care, which is precisely how government health care is delivered.

Without a market there's just no other way of determining who gets what -- and with all of us taxed to hell to pay for the die-while-you-wait health system, there's just no way of getting a real market up and running. In a rationed system, there's only so much to go around, and basic service is all you can expect.

Let's look at Gardasil, the vaccine that promises to guard against cervical cancer. Figures produced by Cathy van Miert suggests the current incidence (new cases per year) of cervical cancer in NZ is 14 per 100,000 women - and one in three will die from the disease. The cost for each course of vaccines is about $600. Looked at as an expense you might consider yourself, as say compared to a holiday in Fiji, or a new iPhone -- or compared to that extra tax you've had to pay this year, or the higher mortage payments due to Alan Bollard's meddling, or what you might pay for insurance -- that doesn't seem an unreasonable investment for yourself or a loved one.

But for the government to save one life would cost $5,217,120! That's the figure a government looks at when deciding what to fund (check out Cathy's figures for the calculation), and for them your life is just another statistic. That's just the way rationed health systems work.

So if you're opposed to the decisions not to fund these drugs, and the next generation of life-saving drugs, then I suggest you rethink your support for a tax-and-spend government-delivered health system. If you don't like the results of rationing, then may I suggest you advocate getting the government out of health care so you can make your own decisions about what you value most. (And those of you who don't like being treated by foreign doctors? I suggest you ask yourself why so many NZ doctors and researchers who've trained here prefer instead to work overseas -- a clue might be that when there's no markets there's no way to determine what someone's services are worth. )

D'you think it might be the same reason that life-saving treatments are rationed? As PJ O'Rourke quipped during the American debate about public-private health care, if you think health care is expensive when it's private, you should see how much it costs when it's "free"! The cost here at home will be paid in women's lives.

UPDATE: But, you say, health care isn't a business - or shouldn't be! Well, says Richard Ralston,
Ultimately all health care is paid for by business activity. Business provides the wages, the return on investment, the insurance, the taxes that pay directly for health care, and the insurance and taxes that fund government programs. When the government manages to provide services at all, it can give you nothing that it does not take from you or others, or from your employer and other employers. The total added value the government creates for your benefit is nothing.
But we can't allow profits into health care, can we? Well, as Richard Ralston explains here, profits lower the cost of health care in the long run.

But we don't want the Americanisation of NZ's health system, do we? Well, consider that America is where many of our NZ-trained doctors and health researchers would either like to end up, or have already ended up. They've already made their choice, and are doing so in larger numbers every year.

Think about it.


  1. In my industry, we regularly weigh-up technical safety related projects under "ICAF" critieria - Implied Cost per Averted Fatality. The screening number at which we consider a project to be economic is somewhere between $US 10 & $US 20 MILLION. Outside this, we have criteria around what actual risk levels we consider to be reasonable - we have a 'tolerable' risk (which is the maximum risk we will even tolerate), and outside that we reduce the risk to an "As Low As Reasonably Practicable" (or ALARP) level - and the ICAF helps in making this judgement.

    Now - this is private enterprise. This is discretionary spending. This is an "evil corporation" who callously exploits workers into slavery and unsafe working conditions, apparently valuing the life of their employees more than a government does to their taxpayers.

    I guess what I am saying is that what you have presented as being a frightningly big number ($NZ 5 million) is actually not a lot of money in ICAF terms, and in terms of what companies will spend to prevent a death of an employee.

    However, in this assessment, I would then look at the other criteria of "ALARP" - is it 'reasonable' to spend (say) $600 Million (or more) on a vaccination campaign? Or more correctly, what other initiatives could give a bigger bang for the buck.

  2. PC, having worked as a supplier to the health industry for the last 12 yrs, I can tell you first-hand what a disaster the public system is, and continues to be.

    We provide a product widely used within the private health industry (in both NZ & Aust) for more than 20 yrs. A clinical *independent* 18-mo cross-over trial in two wards of Auck Hosp from March 1989 - yes, that's '89 - showed remarkable time/costs benefits; one of which was a drug bill reduction of 26% which nationally translates into millions of dollars. These results were published in both 'The NZ Medical Journal' and the 'Australian Journal of Hospital Pharmacy'. For more than ten years we furnished every health bureaucrat that ever there was with that info. (Gave up after that; waste of time continuing to do what doesn't work).

    I even had a mtg with Annette King when she held the shadow health portfolio during the last Nat administration. She professed horror and astonishment, etc, that we had been told (off the record) that the public sector would never adopt such a measure, because if they were to show a reduction in their costs, they would receive a subsequent reduction in the next year's funding. In other words, they would be penalised for saving public money.

    She promised to 'address the issue & waste' if she ever became Health Minister. Well she did, and of course, didn't.

    The hand-wringing bureaucrats continue to come and go with monotonous regularity. Monotonous, because they all make the same noises and do nothing.

    Their personal feasting continues; trust me, I've seen it for myself; while the last time I visited Auck Hosp the lifts still didn't work and the state of the public loos was bloody awful. And that's only the admin.

    Better not get breast cancer, ladies. In spite of Pete Hodgson expressing 'concern', (every MP's favourite word), your chances of getting Herceptin through the system aren't looking too good.

    In the meantime, the private sector providers simply get on the with the business of running their businesses.

  3. On the other hand, considering we are poorer per capita than Tasmanians and we rely on the caprice of agricultural commodities to lift living standards (so much for the knowledge economy) what level of health care can we afford?

    We won't be affording robotic surgery, for example, anytime soon (Intuitive Surgical ISRG).


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