Can Health Care Consumers Make Competent Decisions?

Cross-posted from The Agenda on National Review Online.

Insofar as the debate between the Left and Right on health care is one of philosophy—liberty vs. egalitarianism—it will go on forever. But there may be other areas where empiricism can play a role in bridging our differences.

I was reminded of this last night when having dinner with my cousin and her husband in Chicago. They are both dyed-in-the-wool progressives, whose major objection to a more free-market approach is that consumers are not sophisticated enough to make wise decisions about their own care.

There is something to this critique, one that has been around at least since Ken Arrow founded the field of health economics in the 1960s. Given the complexity of medical knowledge, health insurance plans, etc., isn’t it appropriate for the government to have a large role in protecting consumers from unwise decisions and inefficient practices?

My personal view is that liberals underestimate the degree to which consumers are capable of making sound decisions about complex products. After all, we buy auto insurance policies, laptops, cars, credit cards, etc. all the time; and while the law has a role in protecting consumers against outright fraud, policy experts tend to underestimate the ability of informed consumers to shape efficient market practices. The Internet, in particular, has brought enormous resources to bear on this problem. And where consumers simply can’t learn enough, we mustn’t forget the purpose of the patient-doctor relationship, whatever its imperfections, is to provide just this sort of advice.

This brings me to an intriguing post over at Forbes from Harlan Krumholz, a Yale cardiologist, who suggests that improving the patient consent process could lead to better decision-making and cost efficiencies:

A few weeks ago I made a modest proposal to the medical profession in the pages of the Journal of the American Medical Association. I suggested that we make informed consent meaningful and provide patients with the critical information that should be available to anyone contemplating a major test or procedure.

I suggested that in non-urgent situations, when there is time for deliberation, patients be told their options, given realistic estimates of risks and benefits, informed about the track record of the institution and physicians who will provide the service, and provided an estimate of the costs to them.

My proposal was to standardize the information to patients who are considering some of the most common elective tests and procedures. Assemble panels of expert doctors and determine where there is consensus about the minimum information that all patients should know. Work with educators and psychologists to determine how to convey the information fairly and impartially. Inform patients that the best decision will be aligned with their values and preferences and that no one decision is right for everyone.

This solution to rising health care costs does not involve rationing care. It does not shift payments to patients or reduce payments to doctors. It does not require complicated legislation or regulation. The solution simply ensures that patients are making an informed decision.

Look what happened to John. I arranged for John to meet another cardiologist—someone who would explain the options and be sure that John had realistic expectations about the benefits and risks of the angioplasty procedure. In the end, John opted to focus on treating his risk factors with drugs and defer the invasive procedure. And he has done well.

My hunch is that, just like John, disclosures to patients about their options and expectations will lead many of them to seek less rather than more. Even more importantly, the quality of care will improve as we will be more confident that the care provided is what the patient wants.

In this way, we can reduce health care costs simply by telling the truth.

It is an interesting idea, and one that could be adopted without any government intervention: relevant medical societies (in John’s case, the American College of Cardiology) could come up with consensus guidelines as to what language should be included in the informed consent documents for various procedures.

Taking Krumholz’s idea a step further, it would be nice if these professional societies, perhaps under the umbrella of the American Medical Association, could consolidate all such informed consent language on a single web site. This way, patients and their families could gain access, in plain language, to the best available peer-reviewed assessments of various approaches to their conditions.