On the very day that Steve Jobs died a new report suggests that the U.S.

health care system is spending too much money on people near the end of

their lives. The timing of the two events could not have been more ironic.

Had Jobs been under the care of the British National Health Service (NHS) or

the Canadian Medicare system, he almost certainly would have died two years

earlier. That would have been a major loss for the world, by anyone’s

reckoning.

Here’s the back story. In 2004 Steve Jobs was diagnosed with pancreatic

cancer. He reportedly underwent successful surgery. Then, in 2009 he

received a liver transplant. He died on Wednesday.

I haven’t seen Jobs’ medical records and I have made no real attempt to get

the details about his medical condition. But for the point I want to make

here, none of that really matters. Jobs’ case is interesting because of the

issues it raises.

In most places in the world today a diagnosis of pancreatic cancer would be

considered a death sentence. Aggressive treatment of the condition would be

considered a poor use of medical resources — one involving considerable

expense in return for only a few extra months of life. Perhaps Jobs’ cancer

was of a rare variety that could be removed by surgery.

Even so, almost nowhere else in the world would a pancreatic cancer survivor

be considered an appropriate candidate for a liver transplant. In Jobs’

case, the transplant apparently bought him only about two more years of

life. In no other developed country would a patient get a liver transplant

in order to live two more years.

In Britain, the National Institute for Health and Clinical Excellence (NICE)

is charged with deciding which treatments the British NHS will pay for and

which it will not. NICE considers a treatment cost-effective only if the

cost per quality adjusted life year (QALY) is £20,000 or less (about

$31,000). Since the cost of a liver transplant plus two years of follow-up

care are greater than that number, in Britain Jobs would not have made the

cut.

Overall, the British Medical Journal estimates that 25,000 British cancer

patients die prematurely every year because they do not get access to

life-extending drugs readily available on the European continent and in this

country. The British government reasons that the extra months of life the

drugs will allow is not worth their cost.

There are good reasons why Americans should care about this way of thinking.

Former Senator Tom Daschle’s book, generally regarded as the blueprint for

ObamaCare, praised NICE and recommended we follow a similar approach in the

United States. Donald Berwick, who is currently in charge of Medicare and

Medicaid, has also praised the NICE way of deciding who gets care and who

doesn’t. They are not alone. Most health policy insiders — certainly those

in the Obama administration — believe in health care rationing.

Americans should be thankful that in this country there is more respect for

life. But even here we have a rationing problem. There are enough people

waiting for an organ transplant in the United States to fill a good sized

football stadium, twice over.

Each day, an average of 75 people receive organ transplants. However, an

average of 20 people die each day waiting for transplants that can’t take

place because of the shortage of donated organs. Here is Austin Frakt on

kidney transplants, the most common form of organ transplantation:

\"Today, the waiting list for kidney donations is about 85,000 patients long

and growing. Total transplants per year numbers 17,000, over 10,000 of which

are based on kidneys from cadavers. The rest are live donations. The costs

in treasure and lives due to a lack of kidneys for transplant are high.

Medicare’s ESRD (kidney failure) benefit cost the program $24 billion in

2007, or nearly 6% of the entire Medicare budget. Each year about 4,500

individuals per year die waiting for a transplant.\"

Which brings us back to Steve Jobs. I don’t need to tell you how important

he was to our culture. His devices helped change the way consumers buy

music, read books and enjoy movies. He was considered by many to be the

greatest corporate leader of the last half century. He was compared to Henry

Ford, Walt Disney and Thomas Edison. Kevin Williamson has a great tribute to

Jobs at NRO. Here is David Henderson’s description:

He was an incredible entrepreneur who not only knew how to start a company

but also how to keep coming up with new “insanely great” products as the

company matured. If you want to see Jobs at his young impish best, watch

this 5-minute video

(http://www.youtube.com/watch?v=2B-XwPjn9YY&feature=player_embedded) of

his introduction of the Apple Macintosh when he was only 28 years old.

Plus, Jobs’ end-of-life care enabled him to keep pushing the envelope.

Because of his never-ending devotion to innovation, we got the iPhone after

he was diagnosed with pancreatic cancer and the iPad after his liver

transplant.

So here is my question of the day: Should government (or a bureaucratic

system sanctioned by government) be able to pick and choose among the

potential organ recipients, based on their contribution to society? Or

should the decision be made by lottery? Or in some other way?

Most economists I know think there is a better solution — one that doesn’t

involve having to make life or death decisions about end-of-life care. If we

were willing to compensate people for donating their organs in the case of

an unforeseen death, more people would be willing to sign advance directives

allowing their organs to be used to save the lives of fellow human beings.

In fact, studies show that the need for organs can apparently be satisfied

by willing donors for a price of around $15,000 a year for a kidney and

$30,000 for a liver.

In addition to Steve Jobs’ technological contributions, a change in the way

that we address the issue of organ donation may be yet another lasting

legacy.