Undercover Economist

Bitter medicine

The Undercover Economist – FT Magazine, 10 March

Ann Marie Rogers is in a tough spot. She has an aggressive form of breast cancer, albeit at an early stage. It may kill her, and so she has been through surgery, radiotherapy, chemotherapy and a legal battle which, so far, she is losing. The battle is to get the National Health Service to pay for the cancer treatment her doctor has prescribed, the drug Herceptin. Last month the High Court ruled that the local NHS trust was within its rights to refuse to pay for the drug.

These are uncomfortable cases, but they can’t be avoided in a system where the government pays for healthcare. The NHS has limited funds and someone has to decide the most effective way of spending them. The buck stops with the National Institute for Health and Clinical Excellence (Nice), which regularly makes the headlines after refusing to recommend some treatment or other, most recently for brain tumours. (Nice will issue guidelines for Herceptin only after the drug is licensed for early-stage breast cancer by the European Medicines Agency.)

Nice is responsible for making the following sort of decision: given an extra GBP20,000, should the NHS spend it on a year’s treatment for breast cancer or on laser treatment for 22 people who are going blind? The trade-offs are not phrased like that, but they are real. More money can make today’s trade-off go away but there will always be another.

Nice needs to take a view not only on whether the treatments work well, but also on how serious some conditions are. Would it be better to prevent blindness, or paralysis from the waist down? These are hellish choices to make. Nice makes them.

There is another way. Women such as Rogers, advised by their doctors, could choose and pay for their own treatments and decide their own priorities. It may be impossible for the NHS to decide how much to spend on an unproven therapy, but Rogers has a firm view.

Should we, then, disband the NHS completely and let people buy healthcare the same way they buy food or housing? The problem is that illnesses, and the need for expensive treatments, are unpredictable. It is not fair that as well as being sick, Rogers must find the money to help her recover.

Normally, when we are exposed to big risks, we turn to insurance. But private health insurance works poorly: the US system is not only inequitable but vastly expensive – because heavily insured people are sensitive to quality but not to price.

Ideally we should have a system that would cocoon Rogers from the cruel unpredictability of illness without removing her autonomy. That’s possible, at least in principle: when Rogers’ condition was diagnosed, the government could simply have written her a cheque for GBP100,000 – or whatever was the likely cost of a standard treatment. She would have discussed with her doctor how best to spend it on the open market for healthcare – guided by advisory books, magazines and websites. Nice could concentrate on the easier (if still hugely difficult) problem of how big the cheque should be.

I can think of half a dozen objections to this utterly untried idea; I am not sure they are more serious than the objections to our current system. We don’t need health insurance to take the form of free healthcare any more than car insurers need to cover the cost of petrol; we can, with our doctors, take responsibility for our own healthcare. Rogers may not get what she wants from the NHS, but that will not stop her. She has borrowed the money to pay for the first three months of her course of Herceptin.