On a recent television news program, a group of journalists and sports commentators were discussing Sen. George Mitchell’s report, which described the widespread use of anabolic steroids and human growth hormones in Major League Baseball.
One of the commentators noted that the report had stirred up some action and that Congress had scheduled hearings on the issue. Chris Wallace, one of the more experienced journalists in the group, added, “And we all know how everything is improved when Congress gets involved.”
People who care deeply about an issue view Congressional involvement with joyful anticipation, abject dread or a combination of the two. This is especially true when the action consists of those misbegotten reality shows called televised hearings.
A similar mix of conflicting sentiments arises when an important issue such as health care attracts the attention of campaigning presidential candidates. Those who really care about the issue are happy to see its getting attention. On the other hand, what are the odds that anything sensible will be uttered, or promised, during an election campaign?
The truth is that only two candidates have ever spent much time on the development of a comprehensive health-care system, and only one of those has had the experience of actually implementing the system and being responsible for its effectiveness. The result is that most candidates’ proposals are pretty narrowly focused, and, all too often, unrealistic to one degree or another.
In coming up with health care proposals, the candidates don’t seem to pay much attention to economics, and this endangers even their good ideas. One candidate, in fact, has managed to bring to life a classic fallacy that is discussed in every introductory course in economics: the fallacy of composition.
The fallacy of composition is often illustrated by the situation at a sports arena. One spectator could well be able to get a better view by standing up. If everybody stands up, though, that advantage disappears. Everybody together cannot get a better view that way.
According to the fallacy of composition, it is clear that we cannot all get good health care, or get rich, by suing the insurance companies. But by the pinata whacker theory, it doesn’t matter; litigation will shower money on the plaintiffs and their lawyers. How this process will improve health care for us all is neither clear nor, of course, possible.
That is why it was sad to see any of the presidential candidates taking an interest in the already sad case of Nataline Sarkisyan, who suffered from leukemia and died at age 17 from complications that developed after a bone marrow transplant. Her doctors had recommended a liver transplant but the procedure was rejected by her insurance company, Cigna, because in her situation it was considered experimental, with low probability of lasting success.
After Nataline’s doctors appealed that decision, and after street demonstrations in front of the company’s offices, Cigna relented, but it was too late. The young woman lapsed into a vegetative state and earlier this month, when eventually taken off life support, expired.
Nataline’s parents have engaged a lawyer, Mark Geragos, to file a lawsuit against Cigna, whom they blame for their daughter’s death, but the case against Cigna is far from clear cut. Nataline was not an ideal candidate for a liver transplant, as was evident even from her own doctors’ recommendation.
We do not know the details of the company’s decision-making process, but on the surface it did not seem outrageous or unreasonable. Still, most of us are inclined to cut bereaved parents a lot of slack, even though high-profile litigation is not likely to help them much in containing their grief. They do what they think is best at the time.
Presidential candidates are another story. No one is, or should be, cutting them any slack, especially when it comes to exploiting this case. Whether Cigna is found to be wrong or right in its decision has no real bearing on the reform of our health-care system. The principal effect of litigation like this is to reinforce the pinata theory and encourage more litigation just like it.
Besides identifying fallacies, in introductory courses, students learn that economics is the study of how finite resources get distributed: who gets what, and how much. If a resource isn’t scarce, economics is pointless — in fact, it cannot really exist.
Until politicians and people realize that health-care resources are not infinite, that there are limits to what can be afforded — because one way or another, care delivered to one patient essentially reduces the care available for others — there is no real hope for a health-care cure. Instead, we will be permanently assigned to the placebo group, with daily doses of campaign rhetoric.
James McCusker is a Bothell economist, educator and consultant. He also writes “Business 101” monthly for the Snohomish County Business Journal.
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