Is the net effect of health care zero?
UPDATE: Nyman (2007) points out the RAND study discussed in this piece had a terrible flaw that undermines its argument. See the update below.
In the 1970s, the RAND Corporation picked out 7700 people in six cities and gave half of them free health care. Those lucky ones took advantage of it (spending 30-40% more on average) and they spent it on reasonable things (as judged by medical observers), but they didn’t seem to get any healthier. As the study put it:
For the average participant, as well as for subgroups differing in income and initial health status, no significant effects were detected on eight other measures of health status and health habits. Confidence intervals for these eight measures were sufficiently narrow to rule out all but a minimal influence, favorable or adverse, of free care for the average participant.†
The only exceptions: an improvement in vision (not too surprising that free glasses will help people see better) and an improvement in blood pressure. But for the latter, critics point out that you’re statistically likely to see improvement in one metric in a sample of this size, even if none of the metrics actually improve.
The RAND study was by far the biggest study of this kind, but other studies find similar results. One analysis found that regions whose Medicare programs give out more money (when the underlying healthiness of the residents is held constant) see no increase in survival rates. A replication found the same results in VA hospitals. Cross-national comparisons find “the impact of public spending on health is … both numerically small and statistically insignificant”. Correlational studies find “Environmental variables are far more important than medical care.” And there are more where that came from.
There are two possible explanations. One is that, as Robin Hanson puts it, medicine is a scandal. “[T]he medical research literature must suffer from severe biases, such as fraud, funding bias, treatment selection bias, publication selection bias, leaky placebo effects, misapplied statistics, and so on. How else can we square the usual positive benefit found in medical publications with a net zero benefit?”
The other is that each individual treatment is effective on the particular grounds measured over the particular time period investigated, but that this only leaves people open to other health problems. Drug-coated stents, for example, are effective at opening blocked heart arteries, but they appear to also cause blood clots.†
(Addendum by pde: there is an important third possibility, which is that the 30-40% of extra spending amongst the group that got free health cover simply didn’t result in any better treatment: they might have been charged more, given more hand-holding, and more treatments of unclear benefit, while the control group were getting equally good/bad access to the treatments that are extremely beneficial, such as early excision of melanoma or insulin for type 1 diabetes. It may be that social and cultural factors, rather than ability to pay, determine who gets access to good health care.)
UPDATE: Nyman (2007) points out that one reason this could be the case is that people in the subgroup that had to pay for their health care could voluntarily leave the study if they were sick, returning to their previous insurance regime where they may not have had to pay as much for treatment. And, indeed, he finds that 16 times as many people voluntarily left the pay subgroup as the free subgroup. This would seem to severely throw these findings into question.
As Richard Lewontin argued many years ago:
What is the evidence for the benefits of modern scientific medicine? Certainly we live a great deal longer than our ancestors. [... But a] very large fraction of the change [...] is a tremendous reduction in infant mortality. [... I]n 1860, the infant mortality rate in the U.S. was 13 percent–so the average life expectancy for the population as a whole was reduced considerably by this early death. The gravestones of people who died in the middle of the nineteenth century indicate a remarkable number of deaths at an old age. In fact, scientific medicine has done little to add years for people who have already reached their maturity. In the last 50 years, only four months have been added to the expected life span of a person who is already 60 years old.
[...] As far as we can tell, the decrease in death rates from the infectious killers of the nineteenth century is a consequence of the general improvement in nutrition and is related to an increase in the real wage. In countries like Brazil today, infant mortality rises and falls with decreases and increases in the minimum wage. (42ff)
Of course, universal health care is a lot more politically palatable than a universal living wage.
(Thanks to jmc for suggesting this piece and to Robin Hanson and his site Overcoming Bias for collecting so many resources on it. Hanson is starting a petition to request a larger version of the RAND study.)