Sunday, June 21, 2009


Part of the healthcare reform debate concerns the notion of value, getting something worthwhile for the amount of resources expended. It seems obvious that a desirable healthcare system would provide more value per amount of money expended. Some people even think that poor value is the key to the issue. In an article in the May 25, 2009 issue of National Review, Regina Herzlinger wrote: "In my view, the core problem is that U.S. health care is a bad value for the money spent." In the very next sentence she identifies the difficulty in relying on value as a basis for change: "Unfortunately, I cannot prove my view of the problem because, unlike virtually every other sector of our economy, health care has no real measure of productivity." This defines the difficulty in a nutshell. We really have no way of knowing just how good or bad things are, and no good way of knowing if we are making them better or worse.

Ms. Herzlinger is not alone in lamenting a straightforward measure of value. The lack of such has led the health care system to embrace poor subsitutes, such as adherence to treatment guidelines, comparison to arbitrary benchmarks and consensus guesses as to what constitutes quality. The real issue however is that Ms. Herlinger has slightly mis-stated the problem. It is not that there is no "real measure of productivity," it is that there is no generalizable measure of value from which to derive measures of quality. This conundrum is an inherent byproduct of the notion of quality.

People who attempt to derive consitent measures of quality are trying to square the value circle. There is no objective measure of value for the simple reason that value is not objective, it is inescapably subjective. A particular health care outcome, such as a cosmetic result or shortened recovery time may seem trivial to one patient but highly important to another. Some patients may not tolerate one form of therapy, or care about a particular side effect, while other's experience is the opposite. Some patients may be resigned to age related functional decline while their neighbor intends to go out kicking and screaming.

It is both a great strength and obvious point of criticism that our health care system accommodates the subjective appraisals of value and quality between individuals. The bureaucrat and social engineer is appalled by this situation of inaccessible metrics and seeks to remedy it by prescribing what constitutes value and quality. This makes the job of administration easier but, like many bureaucratic interventions, it defeats the purpose of reform by destroying one of the most desirable ends of healthcare in favor of one of the more insignificant means.

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