I was happy to see Robin present a post on long run health care costs. Though unfortunately he seems to get caught in the same rut as the rest of the intelligentsia.
He asks us to imagine a fountain of youth pill that kept everyone thirty forever. Unfortunately, as your true age got older you would need evermore pills. He says
a fountain of youth pill whose required dosage doubled every decade would either have to be banned, or given to everyone over thirty with insurance. And if everyone were required to have insurance, that would be everyone over thirty. But then the per-person expenses of this system would almost double every decade, growing about 7% per year. Every decade that passed, the oldest folks would be ten years older, and require twice the dosage. But per-capita economic growth rates today are far below 7%. So eventually we’d run out of money to pay for these pills; we’d have to say no to some people, and then they’d quickly die. And the longer we waited before admitting to ourselves that we couldn’t afford to give effective treatments to everyone, no matter what the cost, the worse it would be.
Why would it be worse the longer we lived in self-deception? That really needs to be spelled out because off the top it sounds like Robin is describing a scenario in which we maximize the the total amount of human life we can support. We are also doing this without implicitly valuing anyone’s life over anyone else’s. We save everyone we can, as long as we can, until we hit capacity. This could easily be a utopian scenario.
Again, its probably not the scenario I prefer but one has to be explicit about exactly why throwing everything we have at an extremely effective method of preserving enormous amounts of human life is bad idea. It seems like something the average person would regard as a great idea.
Good thing we don’t have a fountain of youth pill, right? Actually, our real situation is worse. Per capita medical spending in the US doubles about every fifteen years, which is still much higher than our economic growth rate.Yet we struggle to see any substantial correlation between health and medical spending – our medicine is mostly useless on the margin. Its nothing like a fountain of youth pill.
Its not clear why it’s a good thing we don’t have the pill, seeing as how the nightmare scenario seemed pretty good.
However, the analogy with current US spending seems to have a few problems to me.
Implicit in Robin’s story is that the pill had some irreducible non-zero real cost and that we were paying that in order to obtain clear benefits. Once you have you that, it’s a necessary condition that the cost of producing the pill will eventually outstrip our capacity to produce it.
Is this the case in Medicine? Robin, of course, recognizes that there is no clear benefit. And as, such there is no clear resource that one must obtain to keep this process going, aside from human time.
Lets try to stay with the pill story but instead of it being a glorious fountain of youth it goes like this: There are pills which people believe to help ward off death. In fact these pills are just a placebo. Yet, they do have an effect because the placebo effect is an effect.
Because the pills are only a placebo they are simply made out of whatever matter is available plus some human time devoted to stamping the label pill-XXXX on them.
Training is required to become a pill stamper. It is easy for smart people to get this training and harder for less smart people.
This dynamic causes the cost of bringing new pills to market to steadily rise. We need more pill stampers. All of the easy pill stampers have been taken and so now we are forcing more and more people through the pill stamping training so that they can stamp pills.
As the number of pills rises we begin devoting larger and larger fractions of our economy to pill stamping. By necessity this means the pill stamping industry must be growing faster than the overall economy. Else it would be shrinking as a fraction, not growing as a fraction.
Wasting all of this time and effort just to get someone to stamp placebo pills seems like a waste of time and I would argue that it is. But, is it sustainable. As far as I can tell its utterly sustainable.
Under a completely totalitarian system we would eventually lock everyone into the pill stamping industrial complex. From birth they would their lives would be channeled towards the eventual goal of either becoming a pill stamper or producing the bare necessities to support the pill stamping industry.
In a slightly more free economy, resources either through taxation or insurance mandate would be constantly flowing towards the pill stamping industry. This would lead to many many folks seeking jobs as pill stampers and parents likewise funneling their children through pill stamping pre-schools.
All resources would not eventually flow to the pill stamping per se because as it grew to enormity, the price of goods and services needed to support the industry would rise. The pill stampers would still need to eat. The would still need shelter from the elements. They would still need some way to dispose of human waste products.
These functions could come about as separate entities or they could be subsumed into the pill production supply chain. For example, every pill facility could have its own dorms, cafeterias, plumbing system, perhaps even in house facilities to produce cheap uniforms for the stampers.
In any case economic growth would come to be dominated by pill stamping and the economy and pill stamping would be two different names for the same thing. Society and life would revolve around the process of stamping pills.
In imagining this scenario, I my hope is that it is clear it is undesirable. It is a place were all of human hopes and dreams have been pushed aside in favor of “useless” pill stamping.
However, it should hopefully also be clear that it is completely sustainable. Humanity could go on like this forever. There is nothing that I see that would stop this, accept of course for extinction level events that would occur anyways.
The problem with this scenario is not that its impossible or that one day it will hit cliff that we will all fall off of. The problem in its most raw sense is that it takes things that I –Karl Smith – value and trades them away for things that I –Karl Smith – do not value. Thus it is a world that is to me undesirable.
However, there is no law that society or the propagation of the species will breakdown if everyone devotes themselves to something that I think is useless.