Tuesday, September 27, 2011

The Comparative Value of Health Care

By Mike Dorf

In my latest Verdict column, I argue that the legal battle over the constitutionality of the individual mandate in the Patient Protection and Affordable Care Act raises a relatively unimportant constitutional question: Whether or not Congress has the authority, either under the taxing power or the commerce power, to mandate that individuals purchase a service (or good) from a private actor, Congress will remain nearly omnipotent.  As I explain in the column, even if the Court invalidates the mandate, Congress could accomplish essentially the same thing using other powers.

Of course, I also explain, Congress won't, because of the politics.  I then go on to lament that result as a matter of policy.  The large-n studies by health economists show that being within the "flat of the curve," i.e., having health insurance at all, makes a substantial difference relative to not having health insurance, but having different kinds of health insurance doesn't make a noticeable difference.  This result is generally thought to support two policy prescriptions: 1) we should try to lower overall health care costs for people who have health insurance because the additional fancy care for which we're paying doesn't seem to do any good; and 2) we should insure everybody.  As a first approximation, that's pretty much what the PPACA attempts to do, which makes it beneficial.

Here I want to see if I can quantify the expanded-coverage benefits and put them in a little bit of perspective.  This is incredibly tricky because the data we have are often non-comparable.  Moreover, the medical literature contains all sorts of stupid errors.  For example, it is not uncommon to see claims that early detection of cancer leads to higher survival rates.  That might be true, if early detection led to effective early intervention, but it also could just mean that survival is defined as 5-year or 10-year survival, and by detecting cancer earlier, doctors start the survival clock ticking earlier.  E.g., someone who lives 2 years after detection of a stage-3 cancer or 5 years after a stage-1 cancer detected three years earlier.  The early detection isn't leading to a longer survival.

What would be really useful then is some number that cancels out all the noise. Life expectancy should be adequate to the task.  To be sure, it's hardly perfect.  Effective medical care could greatly improve quality of life without affecting life expectancy.  E.g., a successful drug treatment for Alzheimer's might have that profile.  Still, if one is measuring broad inputs, life expectancy will correlate positively with overall health.

So, what is the impact on an average American's life expectancy from going from a state of no health insurance to having health insurance? Searching large databases, I couldn't find anything definitive, but my overall sense is that it's something on the order of a year, probably less.  It's hard to isolate the effect because health and longevity correlate strongly with socioeconomic status, which also correlates strongly with health insurance.

A year of longevity is nothing to sneeze at. Indeed, even something much smaller is substantial.  Suppose that the average longevity benefit of going from no health insurance to health insurance is only a quarter of a year.  Still, getting the roughly 50 million uninsured Americans a quarter of a year each would mean an extra 12.5 million person-years.  Or, dividing by life expectancy, that comes to a savings of over 150,000 human lifetimes (over the course of a human lifetime)--which is an enormous difference.

That's still well short of the per person benefit from quitting, or better yet, not starting smoking, which is about 6 years of life expectancy.  Or obesity, which appears to reduce life expectancy by about 2 years.  These numbers are contested and highly dependent on the specific study, but I'm pretty confident that I have the relative shape right: Smoking is worse for longevity than obesity, which is in turn worse than not having health insurance.

What that all says is that government policy that aimed at promoting longevity could be very effective at low cost if it reduced smoking and eliminated agricultural subsidies for commodity crops (mostly grown for animal feed), which artificially lowers price of, and thus increases demand for, unhealthy foods.  Those are worth doing regardless of the long-term fate of the PPACA.

11 comments:

Hank Morgan said...

I think you underplay the legal significance of a decision invalidating the mandate. The key point is that political constraints prevent Congress from accomplishing "essentially the same thing using other powers." It's highly unlikely the PPACA would have been passed without the public statements from its proponents that it was not a tax.

In other words, by forcing Congress to use certain channels to accomplish certain goals, you are creating real limits on Congressional power. While it's true that these limits depend for their force on political considerations, that doesn't make them any less constraining.

Michael C. Dorf said...

Hank,

You're knocking on an open door. I agree that the political constraints are real constraints. They're just not serious constitutional ones.

Michael C. Dorf said...

To be clear about that last comment, even if the tax approach is off the table, the spending power is not in general. It is off the table in this case, but that's because of the political opposition to this Act.

Justin said...

Elaborating on what Hank said, I think your missing the effect of political restraints imposed this time on Congress on future Congressional acts involving other politically charged regulation. I also think your missing the constitutional law impact on the Court doing something that is so nakedly political. While ultimately Bush v Gore didn't have any major constitutional impact, how much of that was due to a) the fact that Bush was likely to win in Congress anyway, and b) Democrats not rallying around the issue before 9/11 changed the political paradigm?

I think if the Court invalidated the mandate today, this would create serious political consequences. The roadmap for blocking a politically polarizing bill - raise some frivilous, one-off argument in both the courts and the media, create grassroots "legitimacy" behind the legal arguments, and then permit a SCOTUS veto, will provide the Supreme Court will too much political power, and the political debates over lifetime appointments would become exponentially more poisonous.

And that assumes that the SCOTUS decision is in fact narrowly tailored one-off. As many people have already explained, the inactivity-activity distinction is unworkable, and Congress has regularly required compulsory activity. Future attempts by Congress - or even by executive agencies - to require activity may at minimally need to be narrowly tailored; at most be subject to further litigation which will drive up the cost and difficulty of broad regulatory schemes.

While many of the people who are leading the invalidation movement are driven just by hatred for "socialized medicine" or Obama, there are others who are leading the movement for the same reasons they (or their travelers) were beinh Raich - in an attempt to permanently alter the power of government, even if the result is not a complete restoration of the "lost constitution." These people are, unfortunately, not idiots.

Justin said...

PS - excuse the typos.

Michael C. Dorf said...

Justin, because much of what you say here does not disagree with anything I actually wrote, I take your point to be that we should conceptualize the "constitutional" effects of a Supreme Court decision as going beyond concrete doctrinal implications to include political consequences. We might think of this as affecting the "small-c constitution" in the English sense of how government works. I'm happy to agree with that observation. You (and Hank) should understand my Verdict article as discussing the constitutional consequences in the more traditional sense of what is left open as a formal matter.

egarber said...

To add another wrinkle to Mike's larger point, suppose Congress had passed the law unanimously, and the court threw it out.

With no other recourse, the court might face a “switch in time” moment, or the country could undergo the kind of higher lawmaking Ackerman wrote about. But here, if Congress really wants it, a properly framed re-write could be passed in a week. That’s how I read what Mike is saying: it’s just a matter of political will, because the constitutional barriers are flimsy.

That flimsiness should also inform the current cases. If it’s so easy to get around a negative ruling, is that not a sign that the judges were too engaged in rationalizing away a valid law?

Joe said...

"It's highly unlikely the PPACA would have been passed without the public statements from its proponents that it was not a tax."

First, some of its proponents (see, e.g., Prof. Jack Balkin, who defended it various places) DID say it was a tax. The law itself says "tax" a lot of places, including using the tax system to collect the money.

Second, the money still has to be paid to the government. I find it hard to believe that for some reason the whole law (which has various popular provisions, including to those with 20 somethings who now can be on their health insurance) would suddenly fall if the word "tax" is used.

The courts repeatedly have rejected a "simon says" rule -- if it acts like a "tax," it is a tax. Politically, repeatedly, "fees" or whatever is used since the "t" word is deemed politically troublesome. They still are taxes. And, upheld.

If Congress is "constrained" here, it would be special pleading.

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