Critical Diagnosis

Since President Nixon first launched America's war on cancer in 1971, progress against the disease has seemed painfully slow at times. Many observers have declared the war lost, comparing the slow progress on cancer to the tremendous gains in other areas such as heart disease, where mortality rates have dropped by over 50% in just a few decades.

But the U.S. commitment to fighting cancer is second to none. We have recently documented enormous societal gains from the war on cancer. We found that from 1988 to 2000 life expectancy for all cancers combined increased by about four years--translating to about 23 million additional life-years and roughly $1.9 trillion of added social value of cancer care, even after subtracting research costs and spending on medical care for cancer patients. Five-year survival rates for all cancers diagnosed from 1996 to 2003 also increased to 66%, compared with just 50% in the mid-1970s. Surprisingly, we found that about 80% of these overall gains came from improved treatments rather than improved screening. For specific cancers, like breast, colon and non-Hodgkin's lymphoma, the gains in both screening and treatment have been impressive. In terms of society's return on its investment, the war on cancer has clearly been a great success.

These gains are likely due to the robust public financing of basic cancer research combined with a market-driven reimbursement system that rewards private firms for bringing these valuable new treatments and diagnostics to market. In recent years we've made enormous strides through advances in early detection--like colonoscopies and prostate cancer screening--and the development of better treatments for cancer patients. These gains are unprecedented and far outweigh the costs, but we stand poised to make even greater achievements in the years to come as we develop technologies that will allow us to identify cancer at its earliest stages and strike at tumors without harming healthy tissue.

Unfortunately, the pressure to reduce public budgets induced by these reforms will imperil future progress by increasing the likelihood of European-style price controls on existing treatments or new medical innovations.

The U.S. experience greatly contrasts with Europe's, where centralized government funding for cancer care and price controls on new medicines have slowed the battle against cancer, leading to worse outcomes for patients. In a recent study* demographers Samuel H. Preston and Jessica Yu documented that the U.S. outperforms almost all European countries in its cancer screening and treatment efforts.

Unfortunately, the legislation currently before Congress, even taking into account the impact of newly elected Senator Scott Brown, will push the U.S. significantly closer to the European model. While the reforms do expand insurance coverage to millions of uninsured--a laudable achievement--it will also increase the government's share of health care costs. Unfortunately, the pressure to reduce public budgets induced by these reforms will imperil future progress by increasing the likelihood of European-style price controls on existing treatments or new medical innovations.

We are already seeing the first signs of this here as the federal government attempts to limit access to new diagnostic technologies and considers policies such as "comparative effectiveness regimes" that are likely to favor cheaper one-size-fits-all guidelines instead of more expensive, but more effective, therapies.

The recent controversy over mammogram screening in the U.S. was an example of things to come. Debates over centralized policies on population screening ignore that decentralized decisions by patients and their doctors better solve the risk-management problem inherent in cancer care. One-size-fits-all policies are misguided but inevitable results from government policies aimed at being equitable and fair. However, screening for cancer is good for some patients with low tolerance of risk even though it may not be good for others and should therefore be resolved on the basis of informed discussion between patients and their physicians.

It is important to recognize that innovation and access to care are complementary, not contradictory goals. Rather than opting for an expensive new insurance entitlement that the nation cannot afford, Congress' main objective should be to help those who cannot afford health care, not take over the market for those who can. Stimulating the demand of the low-income uninsured is a laudable goal and is pro-innovation since it raises demand. Restricting care for those who can afford it by using government price controls to strong-arm producers is not. Cancer serves as a great example of the value of the U.S. model over the European model. In health care, as in most other markets, you get what you pay for.

Tomas J. Philipson is a visiting scholar at AEI. Paul Howard is the director of the Center for Medical Progress at the Manhattan Institute and managing editor of MedicalProgressToday.com.

Photo Credit: iStockphoto/Jeff Clow

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About the Author

 

Tomas J.
Philipson
  • Tomas J. Philipson is a visiting scholar at AEI and the Daniel Levin Chair in the Irving B. Harris Graduate School of Public Policy as well as an associate member of the department of economics at the University of Chicago. He was a senior health care adviser to the 2008 presidential campaign of John McCain and served in the Bush administration as the senior economic adviser to the commissioner of the Food and Drug Administration from 2003 to 2004 and subsequently as the senior economic adviser to the administrator of the Centers for Medicare & Medicaid Services from 2004 to 2005. Mr. Philipson is an editor of Forum for Health Economics & Policy and is on the editorial board of Health Economics and The European Journal of Health Economics. He has twice been the recipient of the highest honor of his field, the Kenneth Arrow Award from the International Health Economics Association, in 2000 and 2006.  Mr. Philipson is the cofounder of Precision Health Economics, is an adviser to the Gerson Lehrman Group, and is a consultant for Compass-Lexecon and Analysis Group.
  • Email: t-philipson@uchicago.edu

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