Daniel Callahan

Medical Costs, Medical Care and Medical Ethics

VTR Date: June 1, 2010

GUEST: Dr. Daniel Callahan


GUEST: Dr. Daniel Callahan
AIR DATE: 11/21/09

I’m Richard Heffner, your host on The Open Mind.

And this is the tenth time in nearly twenty years that my guest today has joined me here in our continuing and seemingly unchanging conversation about medical costs, medical care and medical ethics.

Indeed, perhaps I should make that “medical costs and/OR medical care”.

Of course, one can’t blame him for the titles I’ve given our various programs together… which range from “Setting Limits: A Calculus of Health Care for the Aging”; “What Must Be The Limits of Medical Progress”; “A Recipe for Failure: Americans’ Quest for Perfect Health”; “Death and the Research Imperative”; and to others that are quite similar.

But in one of our conversations, I suggested that my guest, Daniel Callahan — Co-Founder and President Emeritus of the distinguished Hastings Center, renowned for its examination of ethical issues in medicine, biology and the professions — sounded perhaps more like an economist than an ethicist.

Whatever … his new Princeton University Press volume, “Taming The Beloved Beast…How Medical Technology Costs are Destroying Our Health Care System” returns to his constant theme with a vengeance, namely, “the super-elevated stature given to steady medical progress and technological innovation in American culture, medicine, and industry.”

In America, he argues, “Progress and innovation seem self-evidently valuable, not to be questioned.”

Further, “The tightening thought … the frightening thought, I should say … that these … this innovation that has saved so many lives and reduced so much suffering could itself be playing a leading role in our health care discomfort … is hard to accept, difficult to talk about openly, and politically controversial.”

“It connotes”, my guest writes, “rationing of medical treatment, limits, and a direct threat to the cherished value of relentless progress against illness and death”.

And I would begin today by asking Dan Callahan whether that isn’t precisely what his “Taming The Beloved Beast” does connote.

CALLAHAN: It does exactly connote that. That there’s no, no choice I think we have a health care system which has depended on … that primary value of progress and constant … more, more, more. There’s never enough no matter well people are, they are not happy because they will eventually get sick and you know die of something.

And I think if people really lived to be 150, the doctors offices would still be full, the hospitals would have plenty of business, people would be complaining about death and dying and “keep me alive, doctor” and, and it seems to me it’s a wonderful enterprise, but it’s an enterprise that turns out to be extraordinarily costly.

My analogy is actually to the environmental movement, but where you have all of the benefits of economic progress and growth and gross domestic product. People have more goods, they have longer lives … all sorts of things, but we also know you can’t continue living on the earth at this pace we’re living it on now.

So right now we’re talking about climate control and all of those difficult issues. See … you have an analogous problem in that other area … namely when is enough enough? How do you deal with difficulty problems of growth which everyone loves … people seek … governments want … and that’s always an unpleasant conversation.

HEFFNER: You leave out a word … “rationing”.

CALLAHAN: “Rationing”. Well, we ration right now in health care. I’m rather surprised to find that private health insurance now, does an awful lot of denial of things that people want.

I recently had a heart procedure. I happen to be covered by private insurance, but the people dealing with me thought it was Medicare … and they say, oh they wanted me to sign something. I say, “oh, I’m on private insurance.”

“Oh, well in that case we’ll have to call up the insurance company and see if we can do this procedure.”

That’s rationing by the insurance company. People aren’t aware of that, but, of course, we ration by ability to pay … all sorts of ways we cut corners one way of the other. But, basically we don’t openly … sort of as a form of policy … ration.

When I think of rationing, I think of World War II … yes they rationed … you have the government which tries equitably and fairly to distribute gasoline and there you had very specific rules … a lot of abuse of the system, but, but it was a government effort … in the face of serious shortages to set some limits and some boundaries.


CALLAHAN: But I think that’s what we’re eventually going to need in health care.

HEFFNER: You feel that’s where we’re going?


HEFFNER: Do you feel that’s where we should go?

CALLAHAN: Well, I think we have to go that way. Well, in great part, take Medicare … supposed to be insolvent in eight years … and the time gets shorter every time their, their Trustees talk about it. So we’re getting down to fewer years …it’s going to run out of money.

Our health system is going to double its health care costs within the next ten years. Right now we’re all suffering from high health care costs. That’s one of the main reasons employers are dropping their coverage, the main reason that our co-payments and deductibles are going up. And the very thought that if we don’t do something about it, we’re going to double our costs is, is terrifying, I think.

HEFFNER: And you … do you … I shouldn’t put it “you do”, I should ask you the question … do you or don’t you feel that the programs that are being offered now, the proposals, the Bills that would reform …


HEFFNER: … our system, without rationing …


HEFFNER: … will work well enough.

CALLAHAN: Well, I, I think that’s a myth. President Obama has … in his Address to Congress said, “No Medicare benefits will be cut.”

Well, they’ve got to cut benefits. A lot of the health policy analysts who have looked at this issue for years say within the next few years our choice is either going to have to be to double taxes or cut benefits in half, or some nasty combination of both.

When President Obama says “No benefits are going to be cut” that’s impossible, we cannot … the program cannot survive at the present level of spending, much less an annual growth rate somewhere between five and six percent a year. And that’s, that’s the Medicare program … a beloved program, but it’s in deep, deep trouble. So, so … people aren’t willing to pay taxes in this country … they’re not willing to see their taxes raised …the politicians don’t want to go near that. Of course they don’t want to go near cutting benefits either.

But I suspect what we’ll see is not so much direct intervention on the part of government rationing. What we see … the sneakiest way to do it is just keep increasing co-payments and deductibles … you pay more and more out of pocket all the time. And that … the Medicare program has, has already done that with physician care … for the affluent you now pay a monthly, a monthly fee. I think that’s, that’s probably the way things will go. They just … demand people pay a larger and larger portion of their own income for that.

HEFFNER: And those who can’t?

CALLAHAN: Well, they will be in great trouble, that’s exactly the problem.

HEFFNER: What do you mean by that, let’s elaborate on that, Dan.

CALLAHAN: That, that “great trouble” means that they will not be able to pay the co-payments or deductibles. That would be simply too much out of pocket for them. They, they’ll probably … they’ll stop going to physicians as much to find out what’s wrong with them when they’re in pain. They’ll often wait until they’ll have to go to the Emergency Rooms.

What’s happening already with pharmaceuticals … for a lot of elderly people, they only take half the prescription that they’re supposed to be taking, which is a terrible thing in itself. It’s going to hurt, hurt the care they get. So, we’re, we’re really in a … I think we’re in a terrible situation at this point.

And I’ve been very struck … I’ve been going over … the recent Bills by the Senate and House and they hardly touch the cost issue at all. It’s very depressing to look at. Obama, remember when he began the whole campaign on reform … he, he gave cost a place equal to that of, of access to health care. But it’s increasingly fading, and those Bills have very little of that cost control in it. And I think they’re … that’s, that’s … I think they’re afraid of it … they don’t want to go near it … and that’s been historically the case with Congress. And I think probably they’re making a trade off … kind of a trade-off thing … saying if we want to get greater access, we’d better not talk about cost control at the same time.

The State of Massachusetts, basically is the one state which really has gotten pretty close to universal health care. But they made an early decision that cost would be a serious problem, but they would … get access first and then deal with costs. Well, now Massachusetts down sort of in 90th percent of … percent of people are now covered … but cost has reared its head in a very ugly and, and that program is in trouble. And the question is they made a sort of a tax bill choice … “well, we’ll deal with the costs later”. Well, now they’re dealing with it. And the problem is how to hang on to the program because the costs are going up and the program’s in trouble.


CALLAHAN: That’s it.

HEFFNER: And how do you feel we’re going to do … “deal with it” … we put in quotes …

CALLAHAN: Well, I, I think the first step will probably not be formal rationing … there maybe some, I would think some programs like Medicare now will support some very expensive surgeries, very expensive drugs which only have minimal patient benefit … the cancer drugs that cost you $80,000 a year which will give you 1.5 extra months of life. But then I think that kind of thing will probably get lopped off … they’ll say, “Well, we can’t afford these extraordinarily expensive procedures and chemotherapy and the like where the life expectancy is a very short life expectancy.”

But that’s very hard because interestingly Medicare for … ever since 1965 has been forbidden by Congress to take cost into account as it determines what benefits it will provide.

And that in … and that in itself tells a huge story. Why is that? Doctors don’t want it because doctors don’t want government telling them how to treat patients. Industry doesn’t want it because the last thing the drug and device industry wants is the government messing with their prices. So that the … and the Congress has capitulated all the way down the line for all these years. And to me that’s one of the great reforms … they said now they, they can … they can talk … they can judge on the basis of patient benefit and safety, but not on whether something is worth the money. And that, to me, is one of the major reforms coming. But there’s not a bit of evidence out there that Congress is going to do that now.

HEFFNER: Dan, where do the “Death Panels’ come in to all this?

CALLAHAN: Well, I, I think there was a mis-reading of one of the House of Representative Bills which, which basically was going to set up policy that people would regularly be able to get good compensation for talking with their physicians about end of life care.

End of life care has been a movement going on ever since the Hastings Center started in the early, late sixties or early seventies. Give people greater choice over their care at the end of life. Allow them to say no to treatment they don’t want. Have, have them appoint a surrogate to make decisions for them or …and/or have a Living Will.

And that’s been a movement around a long time. And all of the legislation is aimed to make it a bit … to “a” compensate physicians better for talking to patients which it doesn’t. Physicians are not well compensated for talking to patients … they’re well compensated to use technology. But in the case of end of life care and making patient decisions, you really have to talk to the patient and find out what they want and help them work through that.

And somehow that all got nastily turned into something the government was going to impose on people, that they would be forced to have such counseling. And that in the end they would be forced to do what the Counselor said. Well, that was simply wrong … false.

HEFFNER: But don’t you feel that to some extent the Death Panel business is a function of your own …

CALLAHAN: Well, it is …

HEFFNER: … emphasis on rationing?

CALLAHAN: … it is. You know, but I think that’s absolutely true, the question though is how else are we going to deal with this problem unless we, we ration? To me this is a terrible, terrible dilemma.

Because I, I don’t think we want to really tell people you can’t have treatment. Even though it might not be doing them much good. They may think it does them good. The doctor may think … but in the end we’re, we’re … if we don’t do this, we’re going to see all sorts of other harm done in the health care system.

HEFFNER: How do others do it?


HEFFNER: How do others do it?

CALLAHAN: Well, I think a lot … I think it’s very different in other countries. First of all I should say all countries probably ration to some extent.

But no country openly talks about it, even if they do it. But basically the other countries “a” they’re less hooked on technology, they’re less hooked on very expensive caring for the elderly. Basically they will tell patients “Well, it’s not available … it won’t do you any good. I’m sorry there’s nothing we can do for you.” That’s … it’s often … it’s not written rules.

Partly it’s attitude. I found that somebody in Europe talking about these issues … they … talking about end of life care and all the discussion here … and they said, “Well, I don’t get you Americans. People get old and die. Why, why do you make such a fuss about it?”

HEFFNER: Because maybe we think we don’t … have to.

CALLAHAN: Well … think we don’t have to make a …

HEFFNER: … get old and die.

CALLAHAN: Well, I, I think Americans … one thing’s very …for years has been a myth that young people often say … “When I get … I don’t want those tubes. I don’t want those machines. I want to stop.”

HEFFNER: But they do when they get …

CALLAHAN: But they do when they get there. And interestingly, there’s been a very interesting age creep particularly in Medicare … more and more elderly people getting more and more advanced surgery … even into the open heart surgery … after the age of 100.

Now that’s a terrible trend because you’re getting more and more elderly people are going to come into Medicare. Baby Boomers with more and more expensive ways to treat them. And higher expectations … people are really going to demand this thing as their right.

And Americans are very strong in things they … their expectations are very … physicians complain about this all the time, by the way.

HEFFNER: But how do you protect society against that?

CALLAHAN: Well, your choices … how do you protect society against costs that are going to, in general, ruin the whole health care system? Make it a lot harder for people to get even basic care or, if we don’t control the costs … at the same time as you’re trying to figure out what to do about very expensive procedures that are not of very much benefit? And I don’t think there’s any very happy solution to that.

It all sounds like Death Squads, but the point is somehow or other I think Congress has go to allow Medicare say, to make decisions about what it will cover. And it would be quite proper for it to say that certain things are just too expensive.

HEFFNER: Except for those who are wealthy enough to afford it.

CALLAHAN: Well, if they’re wealthy enough to afford it, they’ll do it. But that’s always been the case. The wealthy … there are a lot of wealthy people now who go to Switzerland because they’ll find better treatment there for certain things. I don’t think you can beat that.

And you certainly can’t set any kind of national rule that … no one, money or not could have a certain procedure. So the question is, it’s really the government programs that you … but interestingly the private sector typically follows what … Medicare policy. So if … as I mentioned … the private sector already says no on very expensive treatments. But that’s not … not known … and it’s complained about, but not, not with the vehemence that, that there’s constant complaints … if we have rationing the government’s going to interfere with doctor/patient relationships. It’s going to be mean, cold spirited, bureaucrats make the decision.

Well, unfortunately now, private sector bureaucrats are making those decisions quite frequently and to the consternation of many. But, again, they’re proper course is that they have to maintain a good profit, they have to remain competitive, so they’re looking for the expensive stuff to cut out, as well.

HEFFNER: But you feel we’ll be in the same kettle of fish or in, in a kettle of fish even if the profit motive isn’t there.

CALLAHAN: Well, what’s striking to me … and this goes back years to earlier conversations. What’s striking to me is every health care system in the world is in trouble to some extent.

It doesn’t matter where you go, they’re all like that … talk about their crisis. Now their costs aren’t raising … rising … anywhere nearly as fast as ours are, but they’re all, all having trouble because they’re all having the same basic underlying phenomenon. Namely, more elderly, more expensive treatments, higher patient expectations.

So, they’re all struggling one way or another to deal with it. So my issue over the years has been … it’s almost a theoretic … what … how … what it would be to have a sustainable health care system. One that … where the, the cost didn’t keep going up all the time, where people were more or less happy with what they got. And which, which lived within some kind of reasonable boundaries and limits.

Just as we’re doing with the environmental movement … how do you have a planet that people can live on fifty years from now?

And I want to say, “Well, how can you have a health care system that we can still afford fifty years from now?” And that’s a very hard thing to pull off. Particularly in our society and every society … you can … I think the Europeans keep control of costs in great part by just strict government regulation, they set controls and prices, they negotiate fees with doctors, they set budget limits for hospitals, they limit the amount of expensive technologies that are going to be available in the country.

And that’s, that’s the way to deal with the cost. And they probably do some quiet rationing, simply by not having quite as much available.

Although their life expectancies all are much better than ours … so people are obviously … health-wise … doing much better in those countries.

HEFFNER: Did you, you ever stop and think about what would have happened if the values of Arrowsmith had …

CALLAHAN: (Laughter)

HEFFNER: … had, had prevailed. Do you think it would, ultimately have made that much difference?

CALLAHAN: I’ve forgotten … I, I read that novel …
It’s been some years …

HEFFNER: Well, I’m thinking in terms of, of, of doctors as businessmen rather than professional …

CALLAHAN: Oh, yes.

HEFFNER: … health as …

CALLAHAN: Well, that’s already happened. One of my good friends is Arnold Relman, the Editor Emeritus of the New England Journal.


CALLAHAN: … and he’s written very eloquently about the whole commercialization in medicine and what’s happened to physicians in the process. And there’s no doubt that there are an awful lot of physicians who love the money, who make a lot of money … particularly, interestingly, in the Southeast and Southwest part of the country. A lot of free-standing doctor owned clinics for specialized treatment and the like.

And all … of course … physicians are very well paid in this country, particularly the specialists. That’s one of the problems, the specialists get three times what the primary care physicians get …

HEFFNER: Yes, but that, that’s really what I’m asking you. Relman has a … I think a more optimistic approach than you do. And he seems to be saying “If only …

CALLAHAN: Yeah, well …

HEFFNER: … you would eliminate the …


HEFFNER: … the profit motive.

CALLAHAN: … I … yeah, but we’re not going to … I … well one thing that’s been proposed by Congress, which I don’t think they’re going to do is eliminate fee for service medicine. Doctors now are basically paid for piecework.

As you know, when you go to a doctor, every … they get a scan, they get, get extra money for doing a scan … unlike talking with you for the same amount of money. And, any many would say let’s eliminate … let’s eliminate piece-work, of a fee for service kind. Let’s have more, what they call “bundling” … you might just have a set fee … say Medicare would provide a certain amount of money to provide an entire set of treatments for a patient, not just one by one. And that’s, I think, a very important, important kind of movement.

But it’s going … but, of course, there’s terrific resistance. Physicians love fee-for-service medicine and, and that’s been part of … I’d like … I mean I’m down on American culture … really, we grew physicians to be sort of bourgeois store-keepers, so to speech. Just individual people selling their wares and a lot of doctors look at it that way and unfortunately, they, they make good money doing it.

HEFFNER: Dan, do you ever look back to the first … your first writings? And say, wag your finger and say, “I told you so?”


HEFFNER: You could.

CALLAHAN: … try not to do that. (Laughter) Well, I, I think it … well, I, I guess I’ve had a sense that … I’ve taken the cost problem seriously in a way that I don’t think even Congress does or want to … but as I say, the new legislation coming out … despite all the early talk … doesn’t say much about the cost issue.

And my feeling has been … it’s there … it’s ominous … it going to … deal with it. We know it’s harmful right now because it’s one of the main things that’s leading … to the increasing number of uninsured. And one of the leading things making companies drop their health care benefits. So, it’s coming, it’s inexorable … it’s like to me, watching the tide rise … so I wasn’t … what I did not do, as most other people did, was basically think happy tales about ways out.

More medical research, for instance … when I first started out I said, “Well, we’ll do more medical research and find cures for all these.”

HEFFNER: And you found it’s, it’s the problem.

CALLAHAN: Well … perfectly … I mean cancer is a wonderful case. The morality rate, or even heart disease … but the mortality … death rate from cancer, heart disease … going up … the cost of caring for cancer patients keeps rising. So you have a paradigm because we keep heart patients alive a longer, longer time. In the past you died of a heart attack and that was cheap for the system. Now you’re saved from the heart attack and you get people like me … who get very expensive surgery … and as somebody joked to me … I was talking with one of the nurses in my cardiologist’s office, and she said, “Well, see you again.” And I said, “So I guess you always see everybody again.” She said, “That’s right, everybody comes back here. The same patients. The rest of their lives, they’ll be coming back.” Because if you have heart disease you’ve likely to need treatment for the rest of your life.

Cancer … people live longer and longer with cancer expensively supported by chemo therapy and lots of sporadic treatment off and on. Sometimes taking daily cancer drugs. It all works, but it’s expensive as can be.

HEFFNER: Would …

CALLAHAN: So … it seemed to me a lot of paradoxes in all this. First of all, the healthier we get, the more money we spend on health care, not less money.

HEFFNER: Now wait a minute, wait a minute … is it that way or the other way around?

CALLAHAN: No. The healthier we … the longer we live and healthier we get …


CALLAHAN: … the more we spend on, on health care. Not less. Whoever said, “Oh, gee, we’re doing pretty well, let’s cut back a bit”? We also, we also spend a huge amount of money on these chronic illnesses, keeping people alive. We’re saving life and, and raising costs at the same time.

And most interestingly, when people say, “Let’s do research, well the research on cancer and heart disease has found … has not found cures and they may never find cures. But they sure know how to keep people alive better … but only expensively. And that’s the real dilemma. What do you do about that?

I have to give a, a lecture next, next month to the directors of all the health … the cancer clinics in the Untied States. I’m really trying to figure what in the world to say to these people. They know they’ve got a problem. They know these very expensive drugs coming along. And the projections in this case, colorectal cancer is going to … in ten years is going to double the cost of colorectal cancer. If you go down the line, a lot of other things. So it’s a… but what I’ve done … I’ve refused to listen to all the siren songs. How am I going to get out of this? More research.

Well research drives up costs … and every economist … it’s … will say it drives up costs, but it’s, it’s worth it because it keeps people alive. But nonetheless, it drives up cost. We, we … talked about … for years and years … getting rid of waste and inefficiency. We know how to get rid of waste and inefficiency … that’s all over the place. Americans love waste and inefficiency (laughter) … that’s most of our lives.

So any way, I refuse to listen to all of those things. And entertain them. I, I entertain them for a while, but then after a while, I said, “No”. This is, this is all sweet talk, it’s not, not panning out. After 20 years I can look back and say all those things that were supposed to save us from these problems … they’re not … they’re still there and if anything, they’re worse now than they ever were.

HEFFNER: And if you were king …

CALLAHAN: If I were king … (laughter)

HEFFNER: What would you do now?

CALLAHAN: If I were king I would first of all …

HEFFNER: In two minutes.

CALLAHAN: In two minutes. I set up a federal agency which does have the power to pass judgments on, on the cost and benefits of, of medical technologies … one kind or another. And it would have to … it would have a real right to place some limits on the health care system, saying “XYZ is simply too expensive, you can’t provide it. If people want it they’ll have to pay for it out of their own pocket.”

Secondly I would have much more coordination of the whole health care. Part of the problem now, it’s half government … and half private. You can’t do much about the private sector. Indirectly what government does influences the private sector, but it’s very tough.

I, I would, I would look much, much more for government direction. I suppose if I were Czar I would have universal health care, but run by the government and that seems to be the only way to control costs. And the only way to get an equitable distribution of resources. We don’t seem to be anywhere near that goal, however.

HEFFNER: It’s so strange …


HEFFNER: … that those whose … supposedly should know the most about how business is run …


HEFFNER: … how an economic scheme works out won’t let us come to that conclusion.

CALLAHAN: Well, what the business people want … basically they want, they want a health care system which is basically … individual consumer choice and better competition among providers. I don’t think that, that would work at all.

There’s no place in the world where that’s worked. But, but the business model … most of the conservatives basically are, are … look at the business world and say “Well, we brought the cost of TV screens and cell phones down, we can surely do it with health care.”

But health care really is different as I found when the doctor told me … I, I fainted one day … after having some other symptoms and he said “Straight to the Emergency Room”. I didn’t have any time to shop around. They sent me to Montefiore in New York. I didn’t have to say, “Well, maybe New York Hospital does better …”. No, I went right to the hospital and they told me we’re going to do this, we’re going to do that and I had, I had to trust my doctors.

HEFFNER: And not paying, but find that society itself paid.

CALLAHAN: Well, in this case I still have private insurance, that’s one of the reasons I kept working. It’s a matter of a very low salary, but private insurance. But, but I would probably have done equally well under Medicare, although the private insurers are more likely to ration than Medicare. It just …

HEFFNER: Dan, with all that care, keep coming back. Thanks so much for joining me …

CALLAHAN: Pleasure.

HEFFNER: And thanks, too, to you in the audience. I hope you join us again next time. Meanwhile, as another old friend used to say, “Good night and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.