Philadelphia Reflections

The musings of a physician who has served the community for over six decades

Related Topics

Right Angle Club 2017
Dick Palmer and Bill Dorsey died this year. We will miss them.

(2) Death as a Portion of Lifetime Health Expense

No amount of scientific research can eliminate the twin cost of being born, and of dying. Nations differ about such costs, but if you want to know what they should be, just look at what they are. Such irreducible healthcare costs are about half of the present total. That leaves the other half of the cost, which might be eliminated by scientific research. If it takes a century to do it, the total elimination of disease cost might be accomplished at a price of about a half a percent per year. That's not totally impossible.

But scientific healthcare cost is different from truck maintenance, in part because some of the components cannot be replaced. The cost of prolonging useful truck life is largely the cost of devising improved maintenance; it's the best we can do within remaining mindful of what it costs. What's mainly different from healthcare is we have declared an end to economic ("useful") life at the time of retirement. Unless productivity of the elderly starts to improve, their retirement costs will rise, even if the cost of healthcare approaches zero. Let's put it another way: the faster healthcare costs come down, the faster retirement costs will go up. Simple arithmetic shows real healthcare costs can only be further reduced by half or $175,000 per lifetime. Useful lifetimes, on the other hand, have already been declared finished by the age of 60-65. The gap is still widening, but even if research stops that trend, things will get worse. Using actuarial methods, it has been calculated that average lifetime medical costs are now about $350,000 per individual, denominated in the year 2000 dollars , and assuming present longevity. That doesn't count health insurance cost, by the way. And it doesn't help to say Social Security payments should be progressively raised, because that's also incomplete arithmetic. Old folks must find something remunerative to do.

With some reservations, the Medicare agency calculates half its expense is devoted to the last four years of someone's life, all of its present expense is approximately $50 billion annually. Unfortunately, 9 million Medicare recipients are disabled but not yet aged 65, so terminal care costs less than $143,000 per person in the year 2000 dollars if you include many permanently disabled persons. Reversing the calculation, you might save $200,000 per person if you paid for nothing but terminal care. Additionally paying for childbirth and neonatal costs might still reduce average savings to approximately $175,000, or about half. That's approximately how you might justify the slogan, "Paying for only the essential two ends of life, would likely cut government costs in half." Another way of looking at it would be to accept Mrs. Sibelius's approximation that half of Medicare costs are borrowed. Paying only for birth and death would leave the present system roughly intact, except it would eliminate the borrowing. Better hurry up, interest rates are expected to rise.

Leaving things roughly intact would assume research costs are lumped with treatment costs. Both offsetting costs might be projected to disappear in a century, although probably at variable speeds. Furthermore, providers of treatment and providers of research are only human; they tend to attack the most expensive diseases first, particularly focusing on painful and mortal conditions. That's only a rough approximation. Everybody has lobbyists, and Congress must take care to balance inputs against the goal: to reduce the net sum of research costs and treatment costs in the year 2000 dollars, by a fraction of a percent (?half a percent?) per year, and to keep that up for a century.

It doesn't sound impossible to construct and enforce such a budget on the combined treatment and research communities, even recognizing the vagaries of taxation and demography. Perhaps a five-year running average would be manageable. But there is one big thing missing. We swept this issue under the rug for fifty years and we could do it for another fifty if we tried hard enough. That is -- we have neglected to consider the cost of success. As the health of the public improves, they live longer. In our system, that means they will need more money for retirement. Lots of money.

With a fixed retirement age, things get worse. Someone is currently running for President of France on a platform of lowering the retirement age to 55. We are, by contrast, at least grudgingly raising the retirement age to 67, at the risk of tearing the political parties apart attempting it. Although Medicare is technically an amendment of the Social Security Act, the retirement age of Social Security has remained essentially stationary, while benefits rise slowly but menacingly in response to inflation at 3% a year. Retirement costs are almost certain to rise more quickly than health costs fall because illnesses are episodic whereas retirement is continuous. Aside from the impossibility of negotiating a solution to this monetary quandary, there is the social disruption of having nothing remunerative to do. There is only so much golf or bridge a normal person can stand to do. Only so much traveling to do before you meet yourself coming back. Only so many fish to catch, entertaining to do, and booze to drink. We have some serious thinking to do before we find anything which is as satisfying as having an occupation. Young people imagine taking a vacation from age 18 to 48 is the same as from ages 60 to 90, but it isn't the same at all. Let's repeat: the cost of improved medical care is not primarily that the doctors will fail, it is that the doctors may succeed, and then you won't know what to do with yourself.

Originally published: Wednesday, April 19, 2017; most-recently modified: Thursday, May 09, 2019