Measuring Life-Years

Ezra Klein thinks we could learn something from the British and French healthcare systems:

[I]magine a system in which the government offered basic coverage to all Americans, regardless of age or income, for all treatments that are less than $33,000 per [quality-adjusted life year]. Above that, the government could offer subsidies for low-income Americans to purchase supplementary coverage, and higher-income folks would have to figure it out on their own.

That's not rationing, incidentally. It's simply setting limits on what comes out of the public purse. And it would have a few advantages over both the current system and most potential alternatives. First, it would create a larger market for lower-cost care. Companies would have more of an incentive to develop affordable treatments because what they'd lose on each individual sale they might make up on volume. Second, it would ensure that all Americans have access to the basic, cheap interventions that are the most important for long-term health. Third, it would preserve a place in the system for innovation but wouldn't bankrupt the government by making an implicit promise to pay for every single treatment that emerged. Indeed, this is basically what the French do, and many people think their health-care system is the best in the world.