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.