Not everyone in similarly rich countries is so luckysomething to remember the next time you hear a call to tame runaway medical spending. Consider New Zealand. There, a government agency called Pharmac evaluates the efficacy of new drugs, decides which drugs are cost-effective, and negotiates the prices to be paid by the national health-care system. These functions are separate in most countries, but thanks to this integrated approach, Pharmac has indeed tamed the national drug budget. New Zealand spent $303 per capita on drugs in 2006, compared with $843 in the United States. Unfortunately for patients, Pharmac gets those impressive results by saying no to new treatments. New Zealand is a good tourist destination, but options for cancer treatment are not so attractive there right now, Richard Isaacs, an oncologist in Palmerston North, on New Zealands North Island, told me in October.
A more centralized U.S. health-care system might reap some one-time administrative savings, but over the long term, cutting costs requires the kinds of controls that make Americans hate managed care. You have to deny patients some of the things they want, including cancer drugs that are promising but expensive. Policy wonks dream of objective technocrats (perhaps at the independent institute to guide reviews and research on comparative effectiveness proposed by Barack Obama) who will rationally scrutinize new treatments for effectiveness, as The New Republics Jonathan Cohn puts it. But neither science nor liberal democracy works quite so neatly.
