One Pill To Break Us All

Imagine a new “fountain of youth” pill – it doesn’t make you immortal, but it does drastically cut your death rate, to that of an ordinary thirty year old. Nanobots maybe. Imagine also that this pill’s required dosage increases about as fast as mortality does today, doubling every decade. So getting that fountain of youth effect requires twice the dosage at fifty as at forty, and twice again at sixty. (Below-dosage use has little benefit.) What would such a pill do to our medical systems?

A purely private medical system would do fine – those who could afford this pill in its required dosage would buy it, and the rest would do without, dying soon if they were very old. A hard-nosed strict government system would also do fine – it would set some policy about who was allowed to get the pill, basically a government-set age of death, like Last Day day in Logan’s Run. (Government elites would probably get to live longer.)

But in the US today, most folks feel that 1) there should not be effective medicines available to some but not to others, and 2) effectiveness, not cost, should be the main criteria for availability. So treatments are usually approved based on effectiveness, regardless of cost. Laws have long required that certain treatments be available to anyone with medical insurance, and new laws now say that everyone must have insurance. Yes, insurance companies and regulators do sometimes find excuses to reject overly-expensive but effective treatments, but it is hard. Once insurance companies approve a treatment for some patients, however, they usually approve it for everyone it could help. For example, patients are usually covered regardless of how many years of life the treatment might gain them, which contributes to excess end-of-life medical spending. This “cover all effective medicine” attitude is a big part of what drives US medical spending so high.

In this sort of system, a fountain of youth pill whose required dosage doubled every decade would either have to be banned, or given to everyone over thirty with insurance. And if everyone were required to have insurance, that would be everyone over thirty. But then the per-person expenses of this system would almost double every decade, growing about 7% per year. Every decade that passed, the oldest folks would be ten years older, and require twice the dosage. But per-capita economic growth rates today are far below 7%. So eventually we’d run out of money to pay for these pills; we’d have to say no to some people, and then they’d quickly die. And the longer we waited before admitting to ourselves that we couldn’t afford to give effective treatments to everyone, no matter what the cost, the worse it would be.

Good thing we don’t have a fountain of youth pill, right? Actually, our real situation is worse. Per capita medical spending in the US doubles about every fifteen years, which is still much higher than our economic growth rate.  Yet we struggle to see any substantial correlation between health and medical spending – our medicine is mostly useless on the margin. Its nothing like a fountain of youth pill. Our refusal to say no to any medical treatment that seems to our wishful-thinking eyes like it might help will also bankrupt us. And we won’t even get a fountain of youth in the bargain.

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  • Someone from the other side

    While I sort of agree with the final argument, the initial parable completely fails to account for increasing economies of scale in production as well as learning curves of such a medicine. Furthermore, if such a pill really gives you something akin to a biological age of 30, it will drastically cut down other health expenditures of everyone who takes it.

    So the solution is really to increase the effectiveness of anti aging medicine…

    • lemmy caution

      I agree. Currently, the cost of pills is not largely a function of the manufacturing cost. Since these pills are so valuable, the government will take over the company, or india will sell unauthorized generics. The price will be driven down to near the manufacturing cost.

      “doubling every decade”

      At some point pretty soon, you are going to need pills that weigh more than the mass of the universe. That will be a problem:

      http://raju.varghese.org/articles/powers2.html

  • Neal W.

    Robin, what do you mean, exactly, when you talk about “marginal” medicine?

    • Aron

      It should be the value per unit of *increased* medical care, rather than the current value per unit. That’s the strict answer. I think he’s generally referring to the fact that most of the low-hanging fruit has been plucked in medicine, such that the rapid increasing price for new treatments does not come with the kind of bang for buck reward of the existing treatments (and in some cases arguably has none, or negative reward). e.g. $100,000 chemo treatments with +3 week life expectancy vs. $5 immunizations developed decades ago which save years.

  • Steve

    You keep saying that medicine is useless on the margin. This is exactly what I would expect. Anything that works we do. This means we go right up to the boundary, ie things that are (almost) useless.

    Health is important why would we stop when there are still things that we could do, even if they did only have a small effect?

    • http://pancrit.org/ Chris Hibbert

      Because the price isn’t constant. If you pay a constant price per unit of a good (as in perfect competition) then it makes sense to buy until the marginal benefit outweighs the cost.

      If the price of a service is growing over time, and we continue to develop new marginal services (with enormous developmental costs) and then deploy them everywhere they’re even marginally effective, then our total cost effectiveness will continuously drop.

      And we actually draw the line closer to “might be effective for some uses” than to “demonstrated substantial usefulness for a particular syndrome.”

  • Steve

    Robin,

    According to your Singularity Economics work, the Singularity is going to bring on exponential economic growth, right? I think you said the economy might double in a few weeks… So that would solve the problem wouldn’t it?

    On a somewhat unrelated note: Given your interest in brain uploading, have you considered the implications of the Amazon cloud failure?

    Would you want redundant hosting for your upload? And if there were more than one copy of your brain upload, would that imply multiple sentient copies of yourself? If so, might they intereact or compete in some way?

    Just an interesting thought that occured to me….

  • http://www.economicsofinformation.com Erik Brynjolfsson

    It seems like this problem has already been addressed and solved.

    Specifically, Obama has proposed Comparative Effectiveness Research and a majority in Congress has written it into law. The government will pay for care if it is found to be more cost effective than the alternatives. Today and in the future, there is nothing preventing private individuals from buying more care (or refusing care) if they so desire. The, 90 year olds can buy any additional treatment they want with their own money (or with their own private supplemental insurance). Similarly with your magic pill.

    There are those who inaccurately use the phrase “death panel” to describe any limits on how much the government will pay for. Your post seems to assume that these people will successfully take charge of health care. Let’s hope that doesn’t happen.

  • Theo

    Manufacturing pharmaceuticals in bulk only costs a few dollars per unit (at most). A civilised society would mass produce such a ‘fountain of youth pill’ and distribute it at cost to the populace. If it is a society run by sociopaths and bandits however, you’re in trouble.

  • Theo

    In fact using better synthetic chemistry techniques one could get the production costs down to fractions of a cent. The incentive to do so, again, in a civilised society, would be immense.

  • http://hanson.gmu.edu Robin Hanson

    Someone, learning curves are included in economic growth.

    Erik, I very much doubt “the government will [only] pay for care if it is found to be more cost effective than the alternatives.” Looks good on paper, but politics won’t allow it.

    Theo, nanobots might cost quite a bit more.

    • http://daedalus2u.blogspot.com/ daedalus2u

      In bulk, for mature products, the major cost is raw materials. Nanobots will be small, so the major cost will be small.

      If the producers of these nanobots have a monopoly, they will charge what ever the market will bear to maximize their profits. I think the outcome will be like what happened in The Youth Monopoly where an alien civilization did have a monopoly on a treatment that would restore life ~10 years at a time essentially indefinitely. They only provided it to the superwealthy and at extremely high prices, which escalated. After a couple of centuries they had drained Earth of everything of value that was portable. Then they left because there was nothing of value remaining.

      The most important feature from a business standpoint is maintaining the monopoly. That can be done through programming to make the nanobots incompatible with any other life maintaining treatment. The next most important feature is a limited lifetime extension so the customer has to buy it again and again and again. That can be done with programming too.

      This might be a net benefit to humanity by draining off the wealth accumulated during a lifetime in its last few decades so it can’t be transferred.

      • Jeffrey Soreff

        In bulk, for mature products, the major cost is raw materials. Nanobots will be small, so the major cost will be small.

        If the producers of these nanobots have a monopoly, they will charge what ever the market will bear to maximize their profits. …
        The most important feature from a business standpoint is maintaining the monopoly.

        And this is a major part of the argument for moving provision of anything with low marginal costs, but high development costs, out of the private sector into the public sector. It is a natural public good. As Theo pointed out, this also applies to many synthetic drugs. The marginal costs are small. Unfortunately, as he also pointed out:

        If it is a society run by sociopaths and bandits however, you’re in trouble.

    • Richard A.

      I very much doubt “the government will [only] pay for care if it is found to be more cost effective than the alternatives.” Looks good on paper, but politics won’t allow it.

      The British seem to be moving more and more in that direction with the National Institute for Health and Clinical Excellence.

      The political opposition in the US for this approach appears to come from the medical-industrial complex, not from voters.

    • http://www.economicsofinformation.com Erik Brynjolfsson

      I agree that there are some politicians fighting against using comparative effectiveness research to make decisions about where to spend our tax money. Ironically, they are mostly the self-described “conservatives”. I wonder if they would also oppose using cost-effectiveness to decide which fighter jets, computers or bridges the government purchases.

      I’m more optimistic than you are about the ability of our system to overcome the “death panel” critique, especially if people like you continue to point out the impossibility of buying everything for everyone.

    • Someone from the other side

      Sure they are. But for a lot of things they don’t really apply (cost disease of the service sector, anyone?). For process technologies such as chemistry or – I assume – nanobot manufacture they likely would.

  • dWj

    Robin, I’ve thought, along these lines, that if an enemy was looking for the ultimate weapon to use against our society or one like it, it would look for a weapon that maimed but didn’t kill — preferably keeping millions of people weighing heavily on our medical system for decades of quasi-life.

    Erik: I think the death panels are among the best features of Obamacare. As you note, the “death panels” do not require that the person die, or even that they quit receiving treatment — it only says that the government will no longer pay for it. If they, or doctors, or pharmaceutical companies, or private charities (or some combination thereof) wish to provide the treatment, they are quite welcome to continue to do so.

    • Robert Koslover

      “if an enemy was looking for the ultimate weapon to use against our society or one like it, it would look for a weapon that maimed but didn’t kill”

      Actually, that is why most nations have outlawed (by “international law” agreements among the leaders of opposing parties) weapons like blinding-lasers on the battlefield. Leaders literally prefer to have their own soldiers killed, rather than maimed or blinded, since (historically) dead people cost less to take care of than crippled ones. (The common belief that such laws stem from some kind of attempt to make war more humane is actually just a myth.)

  • http://www.cgmoore.com Christopher G. Moore

    Your assumption appears to be that the effectiveness of the pill remains constant over decades. The development, in other words remains static over time. An alternative assumption is the ‘fountain of youth pill’ might just as well be subject to a variation of Moore’s Law. With the effectiveness and power of the pill doubling every 18 months (which takes care of the dosage issue) and delivers a corresponding reduction in price. The effect is to make the price of immortality insignificant. In that case, wouldn’t an entirely different set of political, social and economic problems arise? Perhaps this sub-set of problems would prove to be more difficult and intractable than the ones you detail in deciding what immortality selection procedures are put in place.

    • Evan

      i think you are missing the point of the thought experiment. there is no ‘fountain of youth pill’ so stop trying to tweak the cost so as not to address the issue. this hypothetical is supposed to make you consider the cost/benefit of extended life

  • http://entitledtoanopinion.wordpress.com TGGP

    Karl Smith responds here. He follows up by saying the U.S healthcare system is efficient in terms of giving people what they want (mortality apparently not being that important to us) here.

    • http://williambswift.blogspot.com/ billswift

      Interesting. From the graph in the second link, the US government is already spending more per capita then the governments of most of the countries the anti-market people have been holding up as “more compassionate”, et cetera, ad nauseum. The only two countries that have more government spending on health care are Norway and Luxembourg; the US government already spends more than Canada, Germany, Denmark, or the UK; what’s the justification for Obamacare again?

      • http://daedalus2u.blogspot.com/ daedalus2u

        Bill, what the US spends on health care is not intended to provide good health for US citizens. It is intended to provide high salaries and high profits to the health insurance industry so they can spend lots in lobbying politicians. At doing that, the US health care system is the best in the world. The envy of the health insurance industry in every place that doesn’t have government funded health care.

        The justification of Obamacare is that what the US spends on health care should go to provide health care for US residents, not high salaries and profits for the health insurance industry.

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  • http://www.xamuel.com Xamuel

    You’re falling into the Money Illusion.

    This isn’t a video game and drugs are not sold by NPC shopkeepers and that’s the only way to ever obtain them. Pharmaceutical companies are not magical.

    The answer, at least for the first few centuries, would be to nationalize the production of the pills, and draft people to contribute toward their manufacture. Or, depending on how difficult they are to make, just teach everybody how to manufacture them at home.

    Of course, no solution would work indefinitely if dosage doubles every year, since eventually a single person’s dosage would be larger than the volume of the Earth (exponential functions’ll ruin your day like that). That’s not a limit based on economics or politics, but on the rather unnatural hypothetical situation you’ve set up.

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