The economics of health care: lessons from the animal hospital

The veterinarian called at 2:30 a.m with an update on our dog's status. The bladder stone was still stuck in Micky's urethra. Did we want to go ahead with surgery, or...? The unstated alternative: euthanasia.

As I sank back on the pillow I thought "I've been teaching health economics wrong all these years."

There's a diagram in many economics textbooks that purports to demonstrate that health insurance causes excessive consumption of health care services.
The curve "marginal benefits of health care" represents consumers' demand for health care - what people are willing to pay for an extra unit of health care on the margin. The curve "marginal costs" represents firms' health care supply - firms are willing to supply medical care as long as the price that they receive per unit of care is greater than or equal to the marginal cost of providing that care.

If, because of health insurance, it costs the consumer nothing to see a doctor, people will seek medical care until the marginal benefit of additional treatment is zero. At this point, people are consuming health care for which the marginal benefits (zero) are less than the costs. Inefficiency results. There is a deadweight loss, indicated by the blue shaded triangle, representing care for which the costs exceed the benefits - mammograms on symptom-free 30 year olds, for example.

Students typically love this diagram, because it's clear, easy to understand, and makes an argument that many agree with. Unfortunately, it fails to capture the nature of end-of-life health care decisions.

My 2:30 a.m. phone call was not about a marginal treatment - I didn't have a choice about having slightly more care or slightly less care. I didn't have the option of going to an alternative health care provider. The hospital was in a position to make a take it or leave it offer: take the surgery on offer at the price we name, or leave your dog to die. That picture looks a little bit different:

 

The amount I am willing to pay for surgery is the total benefits of treatment - the money value I place on the love my family has for our dog. That's a fair chunk of change.

Yet even this second "price discrimination" diagram is flawed as a depiction of health care. Drawing a demand curve and using it to represent the benefits of care assumes that my decisions reflect rational choices. But when a loved one is in pain, our animal brains kick in, and rationality goes out the window.

"Hyperbolic discounting" is a term behavioural economists use for our tendency to place a low value on future pain and a high value on present gain. If you had asked me five years ago "would you spend $3,000 to give your elderly dog another year of life" I might have said no, there are better ways of using that money. The dog won't live forever anyways. 

Buying surgery will (possibly) prevent me having to suffer grief and pain and loss today. And that's all I care about - the future is far away. Sufficient unto the day is the evil thereof. As I recite my credit card number over the phone I feel relief - Micky will be o.k. - and I don't worry about how I'll pay the  bills, or the fact that he's an old dog who will die within a few years anyways. Or that he could be replaced by an adorable puppy for a fraction of the cost of surgery.

Are there any limits to what a hospital can charge for services? What about economists' assumption that the price charged for, say, surgery, is equal to the marginal cost to the hospital of providing services, for example, the cost of the surgeon's time and of anesthetics? 

In a competitive market, if prices are greater than marginal costs, firms will make profits, and more firms will enter the market. With the increased capacity, firms will cut prices so that they can sell the goods they produce. Prices will fall, until firms are just covering their costs.

But information failures, together with barriers to entry through licensing and training requirements, means that health care markets are far from competitive. I do not know what the marginal benefit of health care is, nor the true quality of care offered by different veterinary clinics. If I knew how to diagnose and treat my pet, I would not be seeing a veterinarian in the first place. I put my faith in the person in the white lab coat, and hope Micky will be all right.

Is it right to equate animal care and human care? From a moral point of view, spending so much on animal care is problematic. The hundreds or thousands of dollars that I am spending on my dog's life could, if spent on mosquito nets or chickens or wells, measurably improve the lives of people - and surely human life is worth more than animal life?

Yet I have learned a valuable lesson from the animal hospital. Grief hurts. Some day I will lose Micky. But there are few limits to what I will pay to put off that suffering until tomorrow. And that time inconsistency - that discrepancy between what my rational self would have wanted, planning ahead and making choices ahead of time, and what I decide in the here and now - is a major barrier to controlling health care costs. 

Post script: it is now three days since Micky's surgery, and so far he appears to be making a good recovery - thanks to the excellent care he received.

Comments

[Stephen Gordon]

This sort of reminds me of that guy who decided not to pay his firefighting service fee. If the decision had to be made by your rational self several years ago - before you had the dog, even - things would have gone differently, and you would be regretting committing yourself to that decision.

[Just visiting from Macleans]

and I don't worry about how I'll pay the bills, or the fact that he's an old dog who will die within a few years anyways. Or that he could be replaced by an adorable puppy for a fraction of the cost of surgery.

Or the young dog at the Humane Society that will be euthanized due to overcrowding/lack of home.

I one had a cat that had a recurring cough. Took him to the vet and was given medication. The cough persisted. So, I dropped by and spoke to the vet - what are the options? "Well, it could be this or that - we'll just try differing medications - a bit of trial and error, but I'd like to do an x-ray, cost $120". So, I asked - "well if you do find a dark spot, what then will you do?" "Same thing - trial and error with drugs - this will just confirm the symptoms." So, I said no to the xrays - but did I not capitulate the next day when I had Rocky with me and the vet was holding him, inducing coughing by massaging parts of his throat? Damn - I got sucked in, again! "Passion over reason" I bet vets take courses in human psychology.

[Nick Rowe]

"Sufficient unto the day is the evil thereof" English revised version, Google tells me. King James leaves out the "is".

A compulsory savings plan is supposed to be the standard solution for hyperbolic discounting, even if you join it voluntarily, to tie your future hands.

I'm trying to think what the solution would have been in this case. A non-revisable "Do Not Resuscitate" commitment? Sort of negative health insurance?

[David]

"Are there any limits to what a hospital can charge for services?"

Interesting question. The basic econ graphs you show assume one-shot games, when in fact people usually have a lasting relationship with their vet. If they gouge you now, they might make good money this time because you don't have time to shop around, but afterward you might start shopping around for another vet.

There is also the question of means. If a hospital had perfect information and there wasn't competition, they could charge you your maximum willingness to pay. But they don't know what that is in reality. They can't charge you more than your maximum willingness to pay, and in trying to guess what that is, they might charge you less in the end.

Glad to hear your dog is doing well :)

[K]

You would, of course, have been better off if you hadn't been presented with a choice at all, which seems very hard to account for in standard economics.  Essentially you were presented with (a slightly less brutal) version of: How much would you charge to kill your dog?  There is a massive negative value in seriously contemplating the answer to that question.

[K]

Does anybody have any sense of what kinds of "cost of saving saving human lives" decisions are typically made in the Canadian health care system"  I don't mean large scale decisions, like causing deaths through long wait times.  More like "Frances' Choice": a procedure that would be expected to significantly prolong life (in the consensus of the medical establishment) is denied because it's too expensive.  Is there a cost threshold that can be inferred from available procedures.  As a function of patient age?

[Patrick]

What if the sick animal was a person, and they were making the decisions themselves? I know I'd pay an awful lot (maybe everything I have and then some) to improve the probability of not dying.

[Sam]

@K is there "a procedure that would be expected to significantly prolong life (in the consensus of the medical establishment) is denied because it's too expensive."

I'm not sure there's a price ceiling in those terms. There does come a point where the patient is sick enough that the risks of doing a procedure outweigh the potential benefits. When that point occurs can be a function of age, but I surmise that it has more to do with ability to recover, fight off infections, retain bone strength and muscle tone, etc. than with some calculation about future years of life.

[Frances Woolley]

Just visiting - with every test there two questions. First, "what depends upon the results of this test?" In your case, the answer was, nothing.

The second is, "what is the probability of this test providing useful information? For example, a routine annual test for the presence of heartworm in an area where the incidence of heartworm is very low, so the probability of finding anything is tiny. People tend to assume that testing can't do any harm, but this is mistaken for a whole load of reasons - for example, x-rays are expensive and radiation potentially harmful.

David, the ability to shop around is another difference between the routine care in the standard diagram and the critical care in the second. There are only two places in Ottawa that carry out the kind of really delicate surgeries that my dog needed, so the scope for competition is limited. In other cities, of course, it is very different - in Vancouver "Indian vets" (i.e. veterinarians trained in India) practice without official recognition from the BC veterinary medicine association, increasing significantly the amount of price competition (that was the subject of a very interesting lawsuit on whether or not English was a bona fide qualification for a veterinarian, which the BC veterinary association won).

K: "You would, of course, have been better off if you hadn't been presented with a choice at all, which seems very hard to account for in standard economics." I think this is right - that is, some innovations in medical technology make us worse off by giving us such unpleasant choices and options - but I don't know how to model/account for it, or if others have done so.

K: health economists calculate "QUALYS" that is the quality adjusted life years saved by various procedures. Even though our dog is 11, the QUALY calculation isn't bad in his case - he's a very long-lived breed, so we figure he could easily make it to 14 or 15 if he makes a full recovery, and his problem is treatable, that is, when he comes home he'll be soon back running around the park and going hiking again. I don't have any QUALY info to hand right now, or much information on non-funded treatments. Every so often there will be a controversy about whether or not to fund some particular drug therapy.

Patrick, "I know I'd pay an awful lot (maybe everything I have and then some) to improve the probability of not dying." Suppose you were a 75 year old widow who lives a somewhat boring and slightly lonely life. If you died, there would be $500,000 for your children and grandchildren to inherit, that would allow them financial security. You're offered a $100,000 life-saving surgical procedure. That's money taken away from your children. Do you do the procedure? I don't know if I would.

Nick, yes, sufficient unto the day the evil thereof sounds better. Proof once again that shorter it better. "Living wills" are touted as the solution, but I don't know, they seem to have their problems.

[Patrick]

Frances: You're a braver person than I in face of the grim reaper. More generous too. If I lived a lonely and boring life as a widower, I'd have no impulse to give $0.5 million bucks to the people who made it lonely and boring.

[K]

So what's the highest available $/QUALYS drug or procedure in Canadian health care, or equivalently, the limit of what can be commercially developed?  Is that the value of a Canadian life?

[Young man.]

There 3 insurers in Canada that offer pet health insurance, with a variety of different deductibles, co-payments, and maximum benefits.

I can easily pay for even a large surgery bill for my pet, but I bought pet health insurance so that I would never be in a position where I would have to make a decision between saving $10,000 and the life of my pet. I know that in many cases, the rational decision would be to save the money. I also know I could not live with myself if I chose to save money over the life of a loved one.

In essence, I'm paying for pet insurance so that I can avoid future psychological distress, not for a financial benefit. The insurance is actuarily a net negative for me, give my pet's age and health, I'd be better of putting the premiums in a GIC.

I can't imagine having to make an similar decision for a human loved one (I could make it for myself -- that's easy). I'd be willing to pay a large amount of money so that this decision would not be mine to make. And in Canada, I do.

I know a little about Health Economics, at an introductory level, and it seems to have a very naive analysis of how humans actually view making end-of-life decisions for other people. Maybe the example of "Frances' Choice" can improve the discipline.

[Brett]

The idea that Frances would have been better off had she not been given the choice reminds me of Barry's Schwartz's book The Paradox of Choice. I don't think he treated this from an economics viewpoint though. Perhaps the need to make choices itself could be treated as a cost or an externality?

[Wonks Anonymous]

Reminds me of this from Bryan Caplan:
http://econlog.econlib.org/archives/2005/12/a_failure_of_in.html
We should step back to the decision to use a particular veterinarian (perhaps when your dog was healthy). Are there other veterinarians who are willing to charge for marginal benefits and can you decide to make them your go-to-guy (or gal)?

[Frances Woolley]

Patrick - "If I lived a lonely and boring life as a widower, I'd have no impulse to give $0.5 million bucks to the people who made it lonely and boring." Shelley Phipps, Peter Burton and I once did some research looking at what happened to family spending patterns when women turned 65 and became eligible for Old Age Security. The idea was compare two couples, otherwise identical, except in one case the woman has no income of her own, and in the other case the woman has Old Age Security income. You know which component of household expenditures increased when women received OAS? Gifts. There seems to be a real gender difference in spending decisions in this regard. (unfortunately this research is published in a book therefore seldom read)

Young man - Looking back on it now of course buying pet insurance would have been the right thing to do, but hindsight is 20/20 (I should have followed my mother's advice).

But you're making a different, more interesting and more subtle point. I wonder if it's right. I'm thinking about the movie Sicko which - despite it's often wildly inaccurate depictions of Canadian and UK health care - has some interesting vignettes. With private health insurance in the US, people end up being in situations where doctors will recommend treatment - or some treatment will be available somewhere - that insurance companies will not pay for. In Michael Moore's version of events, it's because insurance companies are evil profit maximizers. O.k., perhaps, but given the range of treatments available now, unless someone somewhere sometime says "no" it's hard to see how health care spending can ever be limited. At least with Canadian health care, there are rarely individual-level negotiations with insurance companies, either something is covered (e.g. blood cholesterol tests) or it's not (e.g. in Ontario, routine eye exams for certain age groups).

Wonks Anonymous - Thanks for the link, it reminds me of an observation I've made sometimes - that an average economist is more likely to convinced of the existence of discrimination by a sample of one (his child) than by any amount of statistical evidence.

We have done a bit of shopping around to see if we could save money on routine care, but there's no deeply discounted veterinary care available in Ottawa. And there's the quality/price trade-off - our regular vet is expensive, but generally gets the diagnosis right first time. I've heard stories about people who've tried to save money by using cheaper vets, but ended up paying more in the long run because problems were misdiagnosed. To clarify: the frighteningly expensive animal hospital is one of two within driving distance providing emergency care and specialized surgery. So there's not a lot of competition.

Brett - you're right, there is some research on this. Topic for another blog post...

[Linda Welling]

I think the discipline of economics really needs to pursue further this issue of whether more choice is always good: I'd come down firmly on the negative side of this question. With health care this is pressing: what options will we, as a society, allow people, given limited resources? How *should* our kids choose between extending life for their parents and educating their kids? Much as I like Mickey, and empathize with Frances and family, maybe it would be a Pareto improvement to ban the $3000 animal surgery and spend more on foreign aid for mosquito nets. Plus, if surgery were not an option, there would be less guilt and anguish over the yes/no decision.

[Frances Woolley]

Linda, yes, absolutely. When I was making the decision I thought "how will it affect the kids?" It's exam time, they're under a lot of pressure. How would they cope with the loss right now? I felt guilty about the times I've scoffed at students who said "I can't write the test, my cat has just died." The kids didn't even have a chance to say goodbye, I told them Micky would be just fine. They would never forgive me for letting Micky go when there was an alternative - and this is coming from kids at least one of whom is deeply committed to social justice, equity, elimination of poverty etc etc. (though as Nick Rowe pointed out to me, it isn't as if the alternative to expensive pet surgery is giving money to the third world, the true alternative to expensive pet surgery is going on a holiday someplace warm and sunny - perhaps from this point of view the surgery is a valuable contribution to the prevention of global warming).

But if there really had been no alternative, we'd have coped. One thing I didn't put into that blog post, and perhaps should have, is this body of research that suggests that we cope with bad things much better than we expect we will. If you ask someone "what would your life be like if you had to spend the rest of your life wearing a colostomy bag?" they'd say "terrible, horrible, couldn't live" But when people are actually forced to live in that situation, they find that they cope, and their level of happiness does rebound to close to the pre-surgery level after about a year or so.

[brebis noire]

Very interesting post, though I admit I cannot follow the graphs and the theory. Psychological resistance to economic theory perhaps? I'm skeptical because it is based on circumstances that are continually in flux, and it's not my field of expertise. I'm a vet myself, and my decisions to treat or not are based on a) the diagnosis b)prognosis with or without treatment and c) what the owner can pay (based on all kinds of factors...)
But most of my clients are the kind who cannot or will not pay, so the practice is based on a different set of economics: volume and prevention of once-common diseases. It's generally a successful and rewarding framework, except when I look at the shelter next door and see the volume of euthanasias - and the reasons why they are performed. Trust me: you don't want to know.
Essentially what I'm saying is that when there is screamingly awful inequalities in terms of resource distribution among humans (and by ricochet, their animals), I see these kinds of dilemmas of the comfortable and well-off in terms of the inherent - and not the economic - value of a single life. My goal is to prevent suffering and distress whenever possible and to work toward sustainability. I sometimes wonder if these big spenders will be willing to spend another cent on an animal in the future.
If it were my own 11-year-old dog and I was facing that kind of bill, I may very well have sent him off gently and lovingly, because the revenues of my own practice wouldn't enable me to afford that kind of care for my animals (even deeply discounted)!
I lost my two elderly cats this past year, one to kidney disease and the other to congestive heart disease. I know there was more I could've done, particularly for the one with heart disease, but at some point you have to know when (and how) to let go. It's not easy, either way, but I feel good about the long lives they had.
That said, I'm glad that your dog is doing well, and I wish you both all the best.

The most salient point is: do you really want to compare privatized veterinary health care in all of its aspects to human health care? Do you really want to hold up privatized care as some kind of a model to follow? Because there is a very ugly underside as you now know.

[K]

Young Man:  I think you are exactly right about insurance (private for dogs, public for humans) with care decisions made by doctors being the solution.  I was once in the situation of needing critical, expensive life saving care for a young loved one.  I suffered quite a lot of additional pain from even considering the possibility of evacuating the patient to a US clinic (Mayo, or whatever).  The Canadian team of doctors assured me that the care here was every bit as competent as in the US and that all available resources were being dedicated.  This assurance alone (whether true or not) relieved me of an enormous decision burden.  So maybe the cost of choice is an externality (as suggested by Brett) that can be removed through insurance, though likely with losses due to principal agency.  It was a trade off I was very relieved to make.

brebis noire:  I don't see anybody in any of the above comments holding up private care as a model.  On the contrary.  The distinction that is mostly being discussed is between insurance (private or public) and no insurance.  The loss of choice associated with some forms of insurance is being held up as an additional possible benefit of being insured.  That said, you're right that it is a horrible truth that lives in this world are saved principally based on their economic value.  The marginal cost of saving a human life (adding 55 years of life in this case) is estimated at $2000 or $36/year.  So, unless you spend all but $36 of your annual income on saving human lives, you are only quantitatively less guilty than Frances of murder.

$50K per year is, by the way, the amount that the Canadian Government uses as a threshold for buying a QUALY, ie. a quality adjusted year of life.  So, per year... 1 Canadian $50K.  1 African $36.  Frances Dog: $800.  The value of life: priceless.

Full disclosure:  I consume vastly more than $36/year myself.

[Mark Rutherford]

What if your dog were your parent, and you loved him, of course, but he was pretty unbearable, and he had an investment portfolio of $17.8mm that he told you last week that he was considering donating to Greenpeace, even though he knew you had four children to educate and had lost your job?
Would that also change the way you think about the economics of healthcare?
You made absolutely the right decision about Mickey, by the way.

[brebis noire]

K, I'm sorry, I didn't meant to direct that point to anybody posting here. It's a bit of a sore point with me ever since that article from a couple of years back in Maclean's that at the very least seemed to be saying that private veterinary care was so much better than public human care. That's only true if you're rich, it goes without saying (or should)...

Being a vet is a bit like being in environmental law: it's great as long as you can live with the reality that the environment can't afford to pay your wages.

Sorry if I'm taking this off subject.

[Just visiting from Macleans]

Well, as someone unlike brebis noire who could perhaps "follow the graphs and the theory" but chooses not to be bothered trying, I didn't find anything (s)he wrote controversial. Actually, insightful and commendable that someone in the profession would find this blog entry and bother to respond. Good for you, BN!

I'm a bit of a skeptic myself on the anecdote that Frances provides - not unlike a mechanic with the car up on the hoist (ok, not as emotional - but for some men, who knows?). A 2:30 am phone call? Could the dog be given some medication - allow the owner /kids to discuss the matter in the morning, visit the pet, make a decision, say their goodbyes? This seems disturbingly odd. The time of the call/waking up the owner at an ungodly hour. When does the vet sleep?

[Frances Woolley]

brebis noire - when I realize how knowledgeable many of the WCI commentators are, I'm almost afraid to post! Reactions to some of your comments:

"I'm a vet myself, and my decisions to treat or not are based on a) the diagnosis b)prognosis with or without treatment and c) what the owner can pay (based on all kinds of factors..." Point (c) is what economists mean by price discrimination. There was a moment in my conversation with the vet when she hesitated and I said "I can afford to pay" - then she outlined various options.

"Essentially what I'm saying is that when there is screamingly awful inequalities in terms of resource distribution among humans (and by ricochet, their animals)..." Yup.

"Do you really want to hold up privatized care as some kind of a model to follow?" I've often said "I wish Dr M could be my doctor too". They're always so nice to Micky at the veterinary clinic, Dr M takes time, gives him a really good and thorough examination, we never have to wait, we can always get an appointment, he gets yummy treats. But I sure wouldn't want my kids to have to make the kind of decisions about my care that I've had to make about Micky's.

The point of my post is that the rational economic decision-making that - in general- we can rely upon to achieve economic efficiency really doesn't work very well when it comes to health care, *especially* critical end-of-life health care decisions. Lots of the limitations to rational decision making are well known, but people don't usually talk about the hyperbolic discounting issue.

B.t.w., Micky is a miniature poodle (not mentioned earlier because it's slightly embarrassing to own such a stupid dog)which, as a vet, you know means (a) he is incredibly empathetic meaning we're all seriously attached to him and (b) he could (hopefully) live another 3 or 4 or even 5 or more years - there's 17 year old poodles in the neighbourhood. For a newf or a basset hound or a standard poodle we might well have made a different decision.

[Frances Woolley]

Just visiting "when does the vet sleep?" - The animal hospital providing 24-hour round the clock care is not the regular vet. There are just two animal hospitals in Ottawa, hence the possibilities of making a price discriminating take-it-or-leave-it offer. Complicating factors: the effect on the kids at this point in time of the loss/the extremely acute nature of Micky's suffering/if we hadn't paid for the care, the kids would have emptied their bank accounts and done so (between the two of them they could have done it).

Mark Rutherford - yes, moral hazard... (hazardous patients, hazardous doctors, hazardous children, who else?)

I wonder if the uncertainty of health coverage for middle-class Americans is one reason why the middle-class birth rate (i.e. # of children for college-educated women) is so low in the US relative to other countries?

[Just visiting from Macleans]

The animal hospital providing 24-hour round the clock care is not the regular vet. There are just two animal hospitals in Ottawa, hence the possibilities of making a price discriminating take-it-or-leave-it offer.

Ah. So you are self selecting as to the business model that applies. If you yourself had not determined it was a vet emergency, requiring immediate attention, and the attendant take-it-or-leave-it offer, then the outcome might have been different.

I'm a bit uncomfortable questioning your decision, admittedly ignorant of the facts, and I probably would have done the same. Still.

[brebis noire]

Ah, thanks for filling me in on the details about Micky - that does make a big difference in the balance. I love miniature poodles, even when they're trying to bite me.
In my experience, it's a minority of people who can balance that kind of rationality/knowledge with the emotional issues, and that makes every single step in the diagnosis-prognosis-treatment process all that much more fraught for veterinarians (for e.g. you can bust someone's budget with diagnostics in complicated cases, and have nothing left for treatment. And it gets worse every year, simply because of advances in technology.) Small animal medicine is a business, and it evolves along with the economy and the culture. In a recession following a long boom period, adjustments have to be made, but it likely reacts more quickly than human medicine does.

I very much appreciate the point about how rational decision-making does not apply to health care decisions. I don't know how to use the term hyperbolic discounting in a sentence, but I think I get the point about how getting insurance is a rational act. Thanks for specifying the public vs private issue.

[Wendy Waters]

Frances,

I agree there might be a lesson related to the US challenge here, but I'm wondering about your stat related to middle-class, college educated women having fewer children because of medical costs? Isn't the fertility rate of American middle-class college-educated women roughly the same as in Canada for the same demographic group? (But Canada medical costs aren't an issue).

[Frances Woolley]

Wendy, no, interestingly enough the fertility patterns in Canada and the US are different - I notice this all the time when I'm at conferences and all the female Canadian academics are talking about their 1.5 children while a significant minority of female US academics have no children at all. There's an IZA working paper by Miles Corak, Lori Curtis and Shelley Phipps that has the stats on where families with children are in the income distribution - in the US they're much more concentrated at the top and bottom of the income distribution as compared to Canada.

[Marion]

Frances: That's very interesting. I wonder how much of it is health care and how much of it is our more generous parental leave?

And we had to make a similar decision for our cat two years ago. She was diagnosed with a tumour in her spleen. Survival was estimated between 6 months and a year. It could be improved with chemotherapy. We decided on having the tumour removed, but not go with the therapy. I don't know what the cost of that would have been. We didn't ask. But we didn't want her to get stressed out by taking her to the vet so often. So quality of life was (and still is) the most important factor. She's doing fine, a year and a half later. She will be 17 sometime at the end of next month.

I always look at statistics about health care and wonder why people think that just because it's publicly funded, everybody will be abusing it. How many people actually get a physical once a year?

And in the US, a hospital will bill an exorbitant amount for care, and if you're insured, the insurer will send them a cheque for whatever they feel like. And the hospital will be happy with that. But go to a hospital without insurance (and having assets), and they will try to collect every last penny.

[Susan McPherson]

This article just seems like another means of persuading our govt that a two-tier health system makes sense, that it is the people with money or private health care who should reap the benefits, while the left should be left to die.

Yes, I know about the grief of losing a pet, or not being able to afford it's care, and most of us probably do, and sooner than you have.
Your article is really shallow. It is still going to be the people with money, or who have other kinds of power (a network), who get the best health care. Others can't even get the results of their Terry Fox early detection lung study CT scan, because no one cares enough to send them on.

[Patrick]

Susan: Whoa. Where did that come from? Read the post again carefully. What is the second graph saying?

[Nick Rowe]

Damn! And I thought Frances' post had a hidden socialist agenda: that health care for animals should be nationalised, and "death panels" introduced, to prevent us overspending on our pets due to hyperbolic discounting.

[Frances Woolley]

Susan,

The point of the blog is that private markets for health care don't work very well because we're unable to ever say "o.k., that's enough" because we want to postpone the overwhelming pain of grief. (For the record, when I'm old and sick, please do not spend hundreds of thousands of dollars stretching out my life for another year or two).

If you read through the comments you'll see one from a veterinarian who talks about how inequality in incomes are reflected in inequality to access to animal care.

Is the blog a comprehensive examination of the challenges facing the Canadian medical system? No. It's a blog.

[Susan McPherson]

Patrick. Whoa. You tell me what you think the second graph says, ans I will comment on that.

[Susan McPherson]

Francis, the blog is a column endorsed by the national Post. The woman is an economics prof at a university somewhere. It's not just "a blog". When people like that write in newspapers, they influence the general public; in fact, they may even influence health care workers, who knows.

It's not mainly private markets that may not be working well in knowing when to give up on treatment that keeps a person's life going. Any medical system faces the same problems. But it will always be the people with the greater resources who are able to keep their life going, or their pet's. This argument is at risk of becoming circular, and it always will be, except through this kind of writing, by the professor with the dog, healthcare workers might think it's okay to start making decisions about who should live and who should die. And it will be the ones with access to greater resources (money, network, family) who get to have their life extended, whether they want to or not. Francis, this is a blog: http://suemcpherson.blogspot.com.

The thing is, if she wants to write and provide her own situation as a case example, she has every right to do so, but not to give her anecdote with a dual purpose - one, to say this is what people do and shouldn't, and secondly, saying, in effect, I have the money thereore I can!

[Susan McPherson]

Patrick, the point is that whether public or private, any healthcare system is at risk of being under the influence of patients and their families who wish to extend the life of their lived one (or, for that matter, who wish to see it end). We are talking about the influence of money and power, and the inability of the heath care system to manage that well. They don't manage it well, because they try to do so the only way they can, by heeding those with power and money and denying people with nothing or no one on their side.

[Susan McPherson]

I reached this article/blog via the National Post, through http://fullcomment.nationalpost.com/2010/10/22/frances-woolley-healthcare-lessons-from-the-animal-hospital/#more-15716 , and then the link to this site.

No, I didn't realize you were the author, Frances. I guess that's an indication of how dissilusioned I am (not necessarily left-wing) with the system (whichever one). Where I've ended up in my life I don't ever get to say, "o.k., that's enough". Life is a constant struggle to get the medical care I need. Inequality in incomes are reflected not only in access to animal care, I'm sure, if you say so, but in access by humans to health care. The only thing you've managed to do in your post is pass on to everyone the info that you have money, something which is bound to help you in your life, if people didn't realize it before. My original post stands, except I should have addressed it to you.

[Susan McPherson]

K wrote, "Does anybody have any sense of what kinds of 'cost of saving saving human lives' decisions are typically made in the Canadian health care system." Yes, K, they are made all the time, at every level, from the dr deciding if you should have an antibiotic or visit with a specialist to a surgeon deciding not to operate but to let things go their natural course. Does age play a part? Yes. And social class, marital status, home owndership, status in the community. People without resources are left without, and then end up looking like they don't look after themselves, reinforcing the notion that they are ignorant. some are, some aren't, just as with the middle classes. Except if you are middle class, someone will look after you.

[Brad]

"I wonder if the uncertainty of health coverage for middle-class Americans is one reason why the middle-class birth rate (i.e. # of children for college-educated women) is so low in the US relative to other countries?"

Mmm, no? Is this seriously the sort of lens through which even educated Canadians view American issues? The reality remains that most Americans have medical insurance, and while coverage in times of economic struggle is certainly a concern, you're attempting to apply a Vulcan-like logic to what is a biologically-driven desire.

I know many, many college-educated women, in part because I and my wife both teach at university. Many of these women have children. Many do not. Many are still single in their 40s and beyond. Many have never been married. Many simply do not seem to have a great interest in having their own children, even if they may like children. Women and couples may worry about financial security with regard to having a child, but I cannot recall health care coverage ever being part of the discussion. Financial concerns instead revolve around the ability to afford a good home for the child in a good neighborhood with good schools, the ability to pay for college or even private school, the ability to provide all of the things outside of health care that a child needs on a day-to-day basis, and the desire to be on a good footing to achieve that at the outset.

That additionally brings in the question, "When will I/we be on that good footing?" Many of these women (yes, I know I'm using "many" a lot) want to finish their degrees (often a post-graduate degree), and want to establish a career. They see themselves as having children at some point in their late 20s or 30s.

I understand the perhaps logical intersection of health care and having children, but it seems that Canadians (and, honestly, all others outside of America) see health care concerns in every discussion of America, and seem to think Americans are collectively obsessed on an ongoing basis with the topic, whereas here we've got a rather broader view. That is not to deny that health care is not a factor, but it has not been my experience at any point that women have related, directly or indirectly, "I want to have a child, but I'm worried about health care."

And, yes, I've had major health care concerns of my own, and my wife and I have been through "the process," the cost, the fear and the frustration in dealing with an acute blood cancer she was diagnosed with over half a decade ago. I additionally have a slowly progressing degenerative disease of my own, and so am set on a course of needing life-long care in increasing cost and quantity. Both of these issues arose when we were both just setting out in our first "real jobs," and neither of us were on any sort of assured footing.

[Stephen Gordon]

Certain comments that were contributing to a less-than-helpful tone to the thread - including mine - have been temporarily suspended, pending Frances' final decision.

[Frances Woolley]

I've decided to keep these comments, including your most recent comment, Susan, off-line.

You are free to disagree with any/all of the *ideas* in this blog - that's what this game is about.

These comments were deleted because a number of them contained personal remarks about Susan, myself, and other contributors to the blog.

[Susan McPherson]

Would you rather I just told you about end-of-life issues I've had with pets?

[Frances Woolley]

Susan, just keep to the topic, i.e. economic decision making about (potentially) end of life care.

[Just visiting from Macleans]

It's an interesting dilemma - make economics more relevant to the general public by including personal anecdotes - but in doing so risk offending certain individuals who can't relate/think it's trivial for whatever reason. I can see both sides.

(btw my miniature poodle Peppi "le Pew" was quite intelligent - well, up until the time he tried to limbo under the passing car)

[Susan McPherson]

Just Visiting: including personal anecdotes doesn't make it more relevant (is that what you meant or did you mean easier to grasp) for the general public. Even the ordinary general public, if you read comments' sections in the newspapers, complain about people who use anecdotes to explain something.

Something that does get discussed from time to time is user fees, with a certain segment of the population (middle class?) thinking that having them would result in fewer people going to the doctor for trivial reasons (as they normally do, in their understanding of it). In reality, what they would prevent is people going to the doctor when they should be having something looked at. It's hard to equate that kind of concern to the one in this article, about whether to keep spending on health care, no matter how much, to maintain life.

Frances says "Some day I will lose Micky. But there are few limits to what I will pay to put off that suffering until tomorrow."

I think what a good vet would recommend is that you try to take the perspective of the dog. If he is suffering, and recovery from surgery will be painful, and life will be painful after that, then putting him down might be better for him. Sometimes it takes owners time to adjust, as they would have to when a loved one is on life support, and so letting time pass before taking the final step is what some would choose to do. Just because you have money doesn't mean you should feel you have to spend it to help him live longer. But when the right time comes, you'll probably know it.

[Just visiting from Macleans]

I think what a good vet would recommend is that you try to take the perspective of the dog. If he is suffering, and recovery from surgery will be painful, and life will be painful after that, then putting him down might be better for him.

So, you support assisted suicide/euthanasia for humans?

[Susan McPherson]

Just Visiting, No I don't support euthanasia. I don't put obstacles in people's way either.

[Patrick]

Susan, this is what I got from Prof. Woolley's original post:

The graph is making explicit something many of us know (or eventually learn) from experience: decision making about potentially life saving procedures isn't made at the margin. At least not at first. If I'm dying, I wouldn't say "what is the cost vs benefit of one more unit of health car?" because that's not the choice I'm faced with. The choice I face is "what value do I place on my (or my pet's or my loved one's) life?". And that's value(price) is almost always going to be way more than the marginal benefit.

Of course, in reality one can't know that a given procedure is going to work or not. We might have probabilities of success/failure, but stacked-up against doing nothing and the certainty of death, and given our biological/cultural bias to avoid death (hyperbolic discounting), it's almost always seems 'rational' to try something, no matter what the monetary cost.

FWIW, in my experience with pets in recent years at least - a dog put down for pituitary tumour, one for bone cancer in the jaw (it grew so fast that the bone spurs were bursting through the gums at the end; just freaking awful), and most recently a cat with a liver tumour - it's only when the certainty of death and suffering regardless of any medical intervention becomes highly probable that we finally throw in the towel and start thinking on the margin: "is the suffering and low probability of success of more treatment really worth it?". And inevitably we say "no", because we're already way off to the right on the graph and it really just isn't worth it.

It's hard enough dealing with this for animals where there's at least some hope of objectivity. I can't imagine dealing with it for a loved one. Especially a child. Dismal science indeed.

[Frances Woolley]

Susan: "Something that does get discussed from time to time is user fees, with a certain segment of the population (middle class?) thinking that having them would result in fewer people going to the doctor for trivial reasons (as they normally do, in their understanding of it). In reality, what they would prevent is people going to the doctor when they should be having something looked at. It's hard to equate that kind of concern to the one in this article, about whether to keep spending on health care, no matter how much, to maintain life."

The first picture above is the standard economic argument that is used for user fees - people will go to the doctor when the marginal benefit of doing so is less than the marginal cost, because it's free.

I think there there are some people who do consult doctors needlessly. There are also many people who skip regular preventative care because their lives are too complicated to, say, find the time for a blood cholesterol test.

The first diagram in this blog ignores (a) the non-trivial costs of accessing health care (e.g. taking time off work, traveling to a doctor's office, waiting) (b) the difficulty of knowing, before hand, what the benefits of seeking health care actually are and (c) the fact that the big bucks go, not to little marginal health care decisions, but to non-marginal ones, e.g. expensive surgery in life-threatening situations.

Patrick, thanks, yes, that's it.

[Susan McPherson]

Patrick, You're speaking from the perspective of having choice (regardless of how rational or irrational that choice would actually be). Many people in those situations, of facing end of life or having a loved one facing end of life, may not be in the position to make that choice. Very likely, it would made for them, by overworked staff, or staff assuming they know best (such as the lesser case I was involved in of a doctor not even taking the time to talk to a patient about options for treatment of a serious possibly dehabilitating injury). And this is the main reason I wouldn't support euthanaisa. Once you hand over to health care workers the power over life and death, there is always the possibility that it can be misused.

I wouldn't be surprised if there are fewer people attending doctors needlessly than you think. Disregarding any stats on the matter, for people, once again, with little power over making choices of treatment or over their lives in general, health care workers have the power to diminish the severity of a medical problem for some patients (eg arthritic knees) while giving others 'serious' status, in the wait for new knees. And if you don't think this is happening, then it is because you and I are not speaking from the same perspective.

I should think, anyway, that you're missing a large part of the process of decision making at end of life. One reason we are more likely to trust caring dog-owners with making the right decision is that there isn't usually inheritances involved. People can be kept alive long after they would ordinarliy die, with endless procedures. Calling it quits is a big decision, and rational decisions can vary from individual to individual.

I would conclude by saying that comparing animals to humans at end of life may be helpful, but there are also many differences. Humans are political entities, while animals are only just getting to be so and there may be limits as to how far that can go.

[Susan McPherson]

Frances, The idea that some people use the medical system needlessly is often used as a reason to introduce user fees, though it will not be the families with money who become disadvantaged because of fees, should it happen. Need is not really the issue, when it comes to this. It's about getting access to scarce (for some) doctors and medical care.

Another diffference between humans and pets, thinking about end of life issues, is that invariably, the pet is loved. If it weren't it would be long gone. No so with family members who might be the subject of decision-making at the end of life. You have said yourself that you would be willing to pay and keep paying through the nose to keep your pet with you. In the case of humans, however, unless the person dying is a 'pet', or a child, it is quite likely the rational decision-making process kicks in. Bring in that other variable also - inheritance, which may be a confounding variable - or not. These thoughts may explain the gift-giving behaviour also (see Frances Woolley | October 22, 2010 at 12:13 PM )

[Jon]

Francis writes:

I wonder if the uncertainty of health coverage for middle-class Americans is one reason why the middle-class birth rate (i.e. # of children for college-educated women) is so low in the US relative to other countries?

Low? Which countries? What middle-class?

You have to understand that this is an active political issue in the states where you had one side that really cared a lot about getting a certain policy enacted. So for instance you had certain oft circulated quotes about their being 46 million uninsured Americans when the actual number was closer to 30 million. Of those 30 million, roughly half were already eligible government health care and would be automatically enrolled if they ever showed up at a hospital. Of the remaining, almost all have incomes over 50K--nearly half over 75K or are under the age of 34. What's amusing is that all of those numbers actually come form the census bureau. Its just people don't bother to read what the definitions are.

Data mining. Its been the plague of economics for a hundred years. Whenever I read something on a 'political issue', I start downing the grain of salt at every sentence. You should too.

[David]

Frances, turns out you aren't the only one willing to pay big vet bills: http://www.timescolonist.com/Blind+attacked+cougar+guide+Buddy/3753933/story.html