I should probably draw out the implications of the post below a bit. I'm not suggesting that doctors start secretly prescribing sugar pills at their discretion, or treating angina with a chest incision rather than an angioplasty. I doubt Peter Orszag is saying that either. The placebo issue, however, bears very directly on the question of rationing. Folks talk a lot about rationing. It's the great bogeyman of health care reform. Right now we do it by income. You can't get what you can't pay for. This is rarely called rationing, but that's what it is. In England, they do it through judgments on the clinical effectiveness of treatments. You can't get what they won't give you. And there are other approaches too (Henry Aaron and William Schwartz do a good job detailing these issues in their book Can We Say No?: The Challenge of Rationing Health Care
). But there's an interesting question here: What's rationing? If a hypochondriac walks into a doctor's office and demands a CAT scan for chest pain, is saying no "rationing care?" There's no reaso to think the scan helpful. What if an insurer refuses to cover an unproven homeopathic remedy produced by a company associated with the doctor? Is that rationing? This is where we get into the question of value. If the care we're denying is of little value -- if it's no better than the placebo -- is saying no "rationing care?" Or is it simply providing appropriate care? The issue is complicated by the fact that we currently have staggeringly little data on the efficacy of most treatments. Experts estimate between 15% and 50% of care is wasted. Problem is, we don't always know which care is the wasteful care. But sometimes we do. Most data suggests that angioplasties, for instance, are frequently unnecessary. Same with lumbar back surgeries. In that, the studies tracking outcomes sync with the placebo study mentioned below. And unnecessary heart and back surgery is in fact quite dangerous. So if guidelines were released encouraging doctors to be more judicious in prescribing those treatments, would that be "rationing?" Or is it what we expect our health care system to be doing already? Would people be surprised to know that all the incentives in the system point towards prescribing more treatments? And when you look at rationing this way, the question changes slightly: The issue isn't so much saying no as it is getting people away from asking bad question, and getting doctors away from offering bad answers.