The question that very few people on the screamy, sound bitey ends of the health care debate remembers is the very simple one:
This is the place that almost all health care reform plans hit a block. The block is not exactly aided by the fact that the last few weeks or months of a persons life are typically the ones where his medical bills are the greatest. This is, of course, not the case for people who die in accidents and may not be true for those who end up surviving chronic diseases like cancer. But it is sufficiently common that the obvious way to cut the costs of any medical service is to not treat people who are really ill.
Since, eventually, we all die the mdeical cost of our final weeks of life is something that someone is going to have to pay for and, since we're dead at the end of it, it isn't going to be us unless we made suitable savings. So that means someone else has to pay.
And that is the probem.
Perhaps it is best if the government pays. Perhaps not. Perhaps in fact those nasty calculations about years of future life at what quality have a place here. But not addressing this point means that whatever method you use for paying for healthcare will go bust at some point in the future because you are going to be paying more out than you get in.
Eventually a person, community, nation, world will run out of money to pay for terminal care no matter what. This, combined with the fact that it is extremely hard to tell in advance which medical treatment will be worthwhile, means that some kind of rationing is bound to occur because it is quite simple to show that it is otherwise unaffordable.
Let's do some sums to see how this works. Consider the UK with approx 60million inhabitants. If the average cost of terminal care for each death in the UK is £50,000 beyond what the person contributes in taxes during that time then the UK soon runs out of money. £50,000 is pretty small change for someone dying of cancer - 6 months of £500/week drug chemotherapy cocktails, £20,000 for a hospital stay with surgery, a few £1000 a session MRIs and x-rays and you're there, if there's another last ditch operation or some long term pain relief or hospice care then you can easily see the total heading way up above £50,000. I don't know what a heart operation would cost but I suspect it would not be far of £20,000 either so much the same works for people dying of heart disease after months of intervention and treatment too. Of course the unfortunates who get run over by a bus/drunk drver or overdose on recreational pharamceuticals probably cost rather less and so on but I suspect that £50,000 is not a totally unreasonable average amount for the sort of healthcare that would be available with no rationing of any sort.
Google tells me that UK mortality rate is about 10/1000 or 1% meaning that every year 600,000 inhabitants snuff it. At £50k a pop that works out at £30,000,000,000 (£30 billion if you prefer). Total UK tax/duty revenues are currently around £400 billion making that cost 7.5% of tax revenues or (IIRC) about 5% of current total government expenditure. This is just about manageable if the number remains constant but it won't.
As patients fail to die for longer, thanks to advances in medicine, the total non-recouped expenditure on them will increase so that this year's average of £50,000 turns into say 2020's average of £500,000 (in 2009 prices). Before you scoff at that number and date note that £500,000 is not a difficult terminal care medical bill to run up even today. A friend of my father's has had to put his wife in a care home because (to be blunt) she's a vegetable. That home costs £800/week or over £41,000/year. If she stays in her current semi-vegetative state for 10 years (no reason why not, she's not that old) then right there she's cost someone £400,000. Add in, as above, a few hospital stays or other more expensive medical treatments, which let it be noted is what the non-rationers would want, and we're at £500,000 for a person whose quality of life is pretty limited.
If we're in 2020 and average costs in 2009 prices are £500,000 and we've had c.2%/year real economic growth and hence 2%/year growth in tax receipts that gives us at best a 25% increase in government revenues (this is generous) to £500 billion total. The outlay on non-recoverable healthcare in our notional 2020 £300billion/£500billion = 60% of tax receipts. If growth has been rather more anemic (and 2% is pretty good for recent years) then the proportion rises - if there has been no growth at all then its 75%!
7.5% of government income is something that can be handled more or less, 60%+ is not. So rationing of healthcare will have to happen.
This is true whether we are looking at private cover or public cover. If the average cost per inhabitant increases to even the £200,000+ level it is unaffordable. Cutting drug prices may help but, as my discussion of the care home points out, the real cost is in nursing care. While £800 a week for a patient who needs 24x7 attention seems a lot in fact it is probably not making vast profits once you factor in the cost of nursing, cleaning, catering, building rents, heating etc. It would not surprise me to find that the average ratio of staff to patients in any such home approaches 1:1. Assuming that the average salary of the care home staff is approximately the UK median (£479/wk) and the ratio is 1:1 then that leaves £321/patient/week for food, heat, rent etc. £100 for food, £100 for utilities and rent gives us no more than £121 in profit (15%)
I don't know what the solution is going to be but I'm sure that at some point poor people are going to not get years of spnsored assisted living because it would bankrupt the country.