Prostate Testing, Mammography, and Avastin: How to Choose?

There is a flurry of reactions to a draft recommendation from the U.S. Preventive Services Task Force. Although not formally released, the USPSTF is now recommending against PSA tests for prostate cancer. The American Urological Association, on the other hand, continues to assert that the PSA test is appropriate preventive care. (Ann McDonald of Harvard Medical School’s publishing arm has a nice summary of the reaction to the news.) The USPSTF previously sparked controversy in 2009, when it bumped up the recommended age for mammography from 40 to 50 years of age.

In related news, Blue Shield of California has announced that it will no longer reimburse Avastin, except for individual cases as reviewed by a panel of experts. Blue Shield is the largest of five insurers nationwide who have announced that they will no longer cover the drug. Interestingly, Medicare will continue to cover the drug, despite the USPSTF’s negative recommendation.

The general public response to each of these decisions was typical: Guys in white hats versus guys in black hats. It’s just that the metaphorical hats were worn by different parties, depending on who was commenting. For some, the USPSTF’s and Blue Shield’s decisions were yet more evidence of heartless bureaucracies run amuck, denying patients the care that they need. For others, opposition to these decisions was motivated by greedy labs, pharmaceutical companies, and doctors, all of which are less interested in patients’ welfare than jamming as many profitable procedures through the system as possible.

Fortunately, there is a better way to handle these problems.

Suppose that, instead of immediately dividing the parties into good and evil, we responded the way our grandmothers’ would have advised. That is, suppose we believe that all parties have acted in perfectly good faith. Let’s accept that Blue Shield’s medical director really believes that Avastin confers no benefit (except in very special circumstances, to be determined by reviewing individual cases), but his peers at most other health insurers have the opposite conclusion. Let’s accept that the physicians who contribute to the USPSTF’s recommendations on PSA testing and mammography really believe that they are overused, but other physicians disagree based on a different understanding of the evidence.

If this was our world-view, how would we want the government to regulate health insurance? I’m pretty sure that it would look a lot like John Cochrane’s health-status insurance (summarized here), or John Goodman’s ideal health insurance or Brad Herring and Mark Pauly’s incentive-compatible health insurance. That way, each individual could respond to these developments as he or she preferred.

Today, this is not the case. For example, if you are employed in California by a firm that gets its group health plan from Blue Shield, and you thought that Blue Shield had made the wrong decision about Avastin, you would have to lobby within your firm to change coverage. You would face incredible inertia. Almost none of your colleagues who are unmarried men would really care about the issue. If you have individual coverage with Blue Shield, but were recently diagnosed with high-blood pressure and prescribed a medicine to treat it, you might fear to seek coverage from another insurer because you would be charged a higher premium because of your recent diagnosis.

Under Cochrane’s proposal of individual health-status insurance, this problem goes away because when you receive a future diagnosis of breast cancer, this will trigger what is effectively a lump sum that you can take with you to another insurer. It wouldn’t matter whether this happened five weeks or five years from now, because the value was determined when you first bought the policy. Insurers who have comparative advantage in covering breast-cancer patients will compete to enroll patients who want to leave Blue Shield.

In such a system, there can be lots of choices of coverage, with little centralized government control. ObamaCare, of course, moves us in the opposite direction, ensuring that every coverage decision will result in a firestorm of politicized name-calling. Reforms such as Cochrane’s would not only make health care better, but would also free us from the constant temptation to ascribe the worst motives to those who influence our health care.

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