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An Economic Theory of Patient Decision-Making*
Douglas O. Stewart, PhD (Correspondent)
Associate Professor
Department of Economics
Cleveland State University
Euclid Avenue at East 24th Street
Cleveland, Ohio USA
Telephone: (216) 687-4515
Fax: (216) 687-9206
Email: [email protected]
and
Joseph P. DeMarco, PhD
Professor
Department of Philosophy
Cleveland State University
Euclid Avenue at East 24th Street
Cleveland, Ohio USA
Telephone: (216) 687-3901
Fax: (216) 752-1208
Email: [email protected]
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Word count: main text—6260, abstract--295
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ABSTRACT
An Economic Theory of Patient Decision-Making
In bioethics patient autonomy is a central concern. Patient autonomy is exercised in the
informed consent process. The typical bioethicist’s analysis of decision-making centers on
decisional capacity–finding the line between autonomy and its absence. This approach leaves
unexplored the structure of reasoning behind patients’ autonomous decisions.
We present a microeconomic theory of decision-making by patients facing a tradeoff between
treatment cost and damage from a disease. We show that a patient’s desired treatment level
typically departs from the absence of symptoms, the level we call ideal.
This analysis is fruitful in several ways: it shows that decisions often considered unreasonable
may be fully reasonable; such decisions should be fully respected. It explains how physician
misinformation may adversely affect a patient’s decision; it places responsibility on the physician to
provide reliable and full information about both costs and benefits of treatment. Furthermore, it
provides an explicit account of how billing costs influence patient decision-making; it offers
information about the impact of third party payment.
Our analysis indicates that patients may have good reason not to pursue treatment to the point of
absence of physical symptoms, which we assume to be the main goal of medical intervention.
Health care professionals may view such decisions as unreasonable; information may be presented
in a way that influences patients to pursue further treatment. Our analysis shows that beliefs about
the “unreasonable” attitudes of patients are often wrong. We hope that a better understanding of
patient rationality will help to ensure fuller information as well as increased respect for patient
decision-making.
3
After explaining what we take to be the importance of this analysis, we defend it against possible
claims by bioethicists that it is unrealistic and that it fails to adequately consider harm a patient may
suffer by curtailing treatment.
4
An Economic Theory of Patient Decision-Making
Patient autonomy, exercised in the informed consent process, is a central concern in bioethics.
The typical analysis of decision-making centers on decisional capacity--finding the line between
autonomy and its absence. This approach leaves unexplored the structure of the reasoning behind a
patient’s autonomous decisions. To understand the structure of patient reasoning, we present a
microeconomic theory of patient decision-making. This theory is fruitful in several ways: it shows
that decisions often considered unreasonably noncompliant may be in the patient’s interest; such
decisions should be respected. It explains how physician misinformation adversely affects a
patient’s decision; it places responsibility on the physician to provide reliable and full information
about both costs and benefits of treatment. Furthermore, the theory provides an explicit account of
how billing costs influence patient decision-making; it offers information about the impact of third
party payment.
Our approach may be controversial because it concludes that patients may frequently have good
reasons against pursuing treatment to the level at which all physical symptoms are absent. We
assume the main goal of medical intervention is treatment until physical symptoms are absent.
Because health care professionals might view decisions not to eliminate physical symptoms as
unreasonable, these professionals might present information in a way that improperly influences
patients to pursue further treatment. A better understanding of patient rationality should help to
ensure accurate information and should increase respect for patient decision-making.
Our approach is developed mainly in terms of the diagnosis and treatment of diabetes although
the approach is generally applicable.1 We offer a series of graphs to explain decision-making
concerning a patient’s desired treatment level. The graphs are of the sort used in microeconomic
5
analysis. We show that the patient’s desired treatment level departs from the level yielding absence
of symptoms. After explaining what we take to be the importance of this analysis, we defend it
against claims that it is unrealistic and that it fails to consider the harm a patient may suffer by
curtailing treatment.
I
Physicians often diagnose diseases by administering tests to find whether the results differ from a
predetermined physiological level. Hypertension and diabetes are examples of diseases whose
diagnoses depend on such tests. One test for diabetes involves determining whether a patient's
blood glucose level is greater than 125 mg/dl. If the test shows that the patient’s blood glucose
level is greater than 125 mg/dl, then the patient is said to suffer from diabetes, and the higher the
level of blood glucose, the worse the condition.2
Our presentation of an economic theory of patient decision-making about diabetes and its
treatment involves four levels of blood glucose test results: (1) Go, the starting or original blood
glucose level assumed to be substantially above 125 mg/dl, (2) GI, the current blood glucose
diagnosis level of 125 mg/dl, (3) Gn, a blood glucose level somewhat above 125 mg/dl which we
show based on the economic theory is the minimum level of blood glucose to which diabetes
should be treated, and (4) G*, the blood glucose level the patient would choose as the goal of
treatment based on the economic theory. We assume that GI is the level physicians consider ideal
for health and at which they diagnose diabetes because at it no symptoms of diabetes are expected
for the typical patient.
We begin our presentation by using economic theory to examine the rationality of GI as the
treatment level for diabetes.3 Suppose that a patient makes an initial visit to a physician and that
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the physician conducts a blood glucose test. Further suppose that the test’s result is Go, a blood
glucose level substantially above the diagnosis level, 125 mg/dl, so that the physician diagnoses
that the patient suffers from diabetes. Should the diagnosis level, GI , be adopted as the goal of
treatment, or should the treatment goal be different? And, if the diagnosis level of blood glucose,
GI , should not be adopted as the goal of treatment, what level of blood glucose should be used? GI
is determined entirely by a lack of symptoms and does not take all patient benefits or costs into
account. To be fully rational from the patient’s perspective, benefits and costs as evaluated by the
patient should be considered because it is not reasonable for the patient to pursue any activity with
costs greater than benefits. Consideration of benefits and costs should occur when making health
care as well as other decisions. From the point of view of the rational patient, treatment is
acceptable only if there is a positive net benefit (which is defined as benefits minus costs).
Let us pause at this point in our presentation to clarify our use of the terms rational, costs, and
benefits. We consider each from the perspective of the patient. We use the term rational to
indicate that a person optimizes a stable and consistent set of preferences. This is standard usage in
economics and also in much of philosophy. For example, John Rawls uses rational in this way.4
Typically, we use the term reasonable in an equivalent way.
Costs and benefits are measured in monetary units.5 Their measurement provides the valuation
that the patient places on the costs associated with treatment, such as trips to the physician’s office,
billed charges, dietary restraints, exercise time, costs of medication, side effects, and the benefits
from avoidance of symptoms. Benefits are associated with reduction of damage done by the
disease as well as other factors such as the avoidance of future medical costs.6
7
We can measure the total value of benefits and costs or the marginal value. The total benefits are
all of the benefits received by pursuing an activity at its present level compared to the benefits
received by pursuing an activity at its initial or reference level. For example, total benefits of
treating the patient described above to the point that the blood glucose level falls from Go to GI is
the total value of the change in the patient’s health status that results from the blood glucose
reduction. Marginal benefits are the additional benefits received from a one unit change in the
level of the activity whose benefits are being measured. For example, marginal benefits might be
measured for a reduction in a patient’s blood glucose level from 183 mg/dl to 182 mg/dl.
Measurement of total costs and marginal costs is analogous to measurement of the corresponding
benefits concept.
We return to answering the two questions we have posed. First, would a goal of treatment other
than GI be more appropriate? Treatment to lower the patient’s blood glucose level to GI from a
slightly higher level is likely to result in minimal benefits to the patient, i.e., little avoidance of
physical damage, and will have significant costs. At or very near the ideal blood glucose level,
determination of which does not take costs into account, it is expected that virtually all intensified
treatment would encounter a net loss, i.e., benefits from intensified treatment would be less than the
costs. Consequently, positive or non-negative total net benefit occurs at a higher blood glucose
level than the ideal blood glucose level. A rational, fully informed patient would not accept
intensified treatment at or very near the ideal diagnostic level.
Perhaps reference to the graph in Figure 1 helps clarify the result. In Figure 1, the line
[Insert Figure 1 about here]
labeled MC shows the marginal cost of resources used to reduce the patient’s blood glucose level,
8
measured from the perspective of the patient. Previously we listed examples of elements of this
marginal resource cost. How is one to interpret the points on MC? Take for example point Q, the
point on MC corresponding to the blood glucose level, GI . The vertical distance at GI between Q
and the horizontal axis represents the resource cost of reducing the patient’s blood glucose level by
1 mg/dl, given a blood glucose level of GI . The shape of MC indicates that starting at Go , the
resource cost of reducing the blood glucose level by 1 mg/dl increases as the patient’s blood
glucose level decreases from Go to GI .
Further in Figure 1, the line labeled MB shows the marginal benefit of a reduction in the patient’s
blood glucose level measured from the perspective of the patient. As previously mentioned,
marginal benefit is the valuation of the reduction of damage done by the disease as well as other
factors. Interpretation of the points on MB is analogous to interpretation of those on MC. Take for
example point P , the point on MB corresponding to the blood glucose level, Gn. The vertical
distance at Gn between P and the horizontal axis represents the benefit from reducing the patient’s
blood glucose level by 1 mg/dl, given a blood glucose level of Gn. The shape of MB indicates that
starting at Go , the benefit from reducing the blood glucose level by 1 mg/dl decreases as the
patient’s blood glucose level decreases from Go to GI .
In Figure 1 and other figures following, linear functions are used to depict relationships between
MC and blood glucose level and between MB and blood glucose level. Complex curves, convex
or concave to the horizontal axis, may be more accurate representations of the relationships. But
more complex functions would not change the results of our analysis as long as MC is negatively
sloped and MB is positively sloped.
With this explanation of the graph in Figure 1 in mind, let us use it to illustrate the result that a
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rational, fully informed patient would not accept intensified treatment at or very near the ideal
diagnostic level.
Assume that the patient is presently receiving treatment that results in a sustained level of blood
glucose of Gn.. Would the patient receive a positive net benefit from intensified treatment to further
reduce the blood glucose level? According to Figure 1, this patient has MC greater than MB at Gn.
With this relationship between MC and MB at Gn , the patient would actually receive negative net
benefit from the intensified treatment, i.e., the patient is better off at Gn than at GI .
The preceding analysis is represented graphically in Figure 1 in which the blood glucose levels
GI and Go are compared. Moving from the original blood glucose level, Go , to G* provides a net
benefit represented by the sum of all net gains ( MB-MC at each blood glucose level) along the
way. The net benefit from this change in blood glucose level is captured by the area of the triangle
JKL. Moving from G* to the ideal level, GI , involves a net loss. This loss is represented by the
area of the triangle LQR. The area of the triangle LQR is greater than the area of the triangle JKL.
Thus GI is shown to be a blood glucose level where the total benefits of treatment are less than total
costs of treatment for this person with an initial blood glucose level of G0.
The result that a rational, fully informed patient would not accept intensified treatment at, or very
near, the ideal diagnostic level occurs when the appropriate treatment level is viewed from the
patient’s perspective. Viewed from a medical perspective, treating to the ideal level, a level that
virtually every rational patient would reject, is also unreasonable. After all, treatment of a disease
is for the benefit of patients. Furthermore, an unreasonable treatment goal represents an
irresponsible use of resources.
We have concluded that GI is not the proper level of blood glucose to use as the goal in treating
10
diabetes. Then, what is the proper level? Finding the answer to this question requires additional
analysis.
We denote by Gn the minimum level of blood glucose to which diabetes should be treated.
Economic theory provides a conceptual basis for determining Gn. Treatment to any specific level
1ENDNOTES
*Earlier versions of this paper were presented at the 2005 Annual Meetings of the Eastern
Economic Association, New York, New York, March 5, 2005 and at The Humanities and Expertise
conference sponsored by The Humanities Center at Carnegie Mellon University, Pittsburgh, PA,
April 9, 2005. We thank all discussants and session participants at these conferences for their
useful comments. The criticisms and suggestions for revision by the editor and two reviewers have
proved very helpful. As is the practice, we absolve all but ourselves of blame for any remaining
errors and shortcomings.
? For the purpose of the present paper we accept as proper the diagnosis of a disease at the highest
level of health status at which the patient does not exhibit the physical symptoms of the disease.
While we believe this standard for diagnosis results in identifying too many diseased individuals,
discussion of this issue is beyond the scope of this paper.
2 The Expert Committee on the Diagnosis and Classification of Diabetes Mellitus. “Report
of the Expert Committee on the diagnosis and classification of diabetes mellitus.” Diabetes
Care 1997; 20 pp. 1183-1197. This report provides a review of this and other tests that are
used to diagnose diabetes. The report explains that 125 mg/dl is based on the fasting blood
glucose test. Other procedures use different numeric values as the basis for a diagnosis of
11
of blood glucose is unreasonable when, from the starting level of Go, total net benefit from
treatment is less than zero; no treatment of diabetes should be made to a lower level of blood
glucose. When the total net benefit is greater than zero, treatment would result in greater gains than
losses. With total net benefit greater than zero, an even lower level of blood glucose could be
considered as a goal of treatment. At any blood glucose level above the one where total net benefit
diabetes. Also, the range of 110-125 is called "impaired glucose metabolism."
Nevertheless, for the purposes of this paper, we center on 125 mg/dl.
3 We are presenting a model of patient decision-making that describes the choice made by a patient
under the assumption of rational behavior. Numerous empirical studies showing behavior
consistent with this model in the context of health and health care are cited in Sherman Folland,
Allen C. Goodman and Miron Stano, 2004, The Economics of Health and Health Care, Upper
Saddle River, NJ, Pearson Prentice Hall, pp. 569-600. Insofar as the model is normative, it relates
to physician behavior of accepting informed judgment of patients.
4 John Rawls, 1971. A Theory of Justice. Cambridge, Mass.: Harvard University Press. On p.143
Rawls explains that he is using the term as it is typically employed in social theory. In footnote 14,
he provides excellent citations, mainly to economists and philosophers. In bioethics, Bernard Gert,
Charles M. Culver, and K. Danner Clouser offer a nonstandard notion of “rational.” They define
rational negatively, as not irrational. They list activities that are irrational, such as killing oneself
or desiring to be disabled. A rational person does not do such things. However, since it is
sometimes rational to “harm” oneself, they add that such activities are not irrational if there is an
“adequate reason for so acting”; 1997. Bioethics: A Return to Fundamentals. New York: Oxford
University Press, p. 26. This proviso deprives their view of any explanatory power. Our more
12
of treatment equals zero, the same analysis holds: the treatment goal can be reduced with a positive
total net benefit. The stopping point occurs where total net benefit just equals zero. This stopping
point is the minimum blood glucose level, Gn, which should be used as the goal in treating diabetes.7
Gn is the point at which resources are not wasted in the sense that treating to Gn from the starting
level of Go involves no net loss.
The blood glucose level Gn might be relatively close to GI, and so physical damage to the patient
from diabetes is low. From the physician’s medical perspective in this case, setting the goal of
treatment at Gn should be unobjectionable due to good medical results and the absence of net loss to
the patient. In other cases, the treatment level, Gn , might exceed the ideal or diagnosis level, GI , by
a significant amount so that there would be poorer medical results although the net loss from
treatment is zero to the patient.
The blood glucose levels GI and Gn are compared graphically in Figure 1. The triangle LOP has
an area equal to that of triangle JKL. Thus Gn is a blood glucose level where the total benefits of
treatment are equal to the total costs of treatment for this patient with an initial blood glucose level
of G0. Furthermore comparison of GI and Gn shows that Gn is a higher blood glucose level than the
ideal level, GI , the level of blood glucose without physical symptoms. Arguably, Gn is the lowest
standard use of rational provides a better basis for predicting and explaining behavior than their
nonstandard approach.
5 While in a strict sense, the costs and benefits flowing from choices need not be measured in
monetary units, use of a monetary unit makes for a convenient measuring stick.
6 Also, there may be “externalities,” such as benefits to relatives who desire good health for the
patient.
13
blood glucose level which should be selected as the goal of treatment for this patient.
Is Gn the blood glucose level that a rational patient would accept as the target level for treatment?8
The answer is “No.” Accepting Gn means that a patient is not maximizing total net benefit. Recall
that Gn is the point at which there is no net benefit to the patient compared to Go . From the
patient’s perspective, pursuing treatment until net benefit equals zero may be unreasonable because
a treatment goal at a higher blood glucose level may lower all patient-evaluated costs so that
damage from the additional physical symptoms would be acceptable. Instead of choosing zero net
benefit, the rational patient will seek to maximize total net benefit.
How do we identify the blood glucose level at which total net benefit is maximized? The answer
to this question derives from standard economic analysis.9 The benchmark is this: maximize total
net benefit by pursuing an activity until marginal benefit (MB) equals marginal cost (MC). From
the patient’s perspective treatment should be pursued to the point that MB from treatment of
diabetes just equals the MC of treatment.
To appreciate the implication of equality between MB and MC, consider a blood glucose level
that departs from the blood glucose level at which MB equals MC. Suppose that MB is greater than
MC at the current blood glucose level but that a patient has already made health gains due to
treatment. Pursuing treatment further, decreasing blood glucose level by one additional unit, means
that additional net gains will be made because the marginal (or added) benefit will exceed the
marginal (or added) cost. Remember that treatment activity at the margin means that increased
treatment has resulted in an additional unit of decrease in the blood glucose level. Whenever MB is
greater than MC at the current blood glucose level, it would be reasonable to pursue further
treatment because the next unit of reduction additionally gains more than the additional cost. This
14
net gain is added to net gains already made. Because this is from the patient’s valuation, it is
rational for the patient to continue treatment to this lower blood glucose level. The same analysis
occurs at every blood glucose level where MB is greater than MC, i.e., at all such levels, treatment
to lower the patient’s blood glucose level should be intensified. From the patient’s perspective a
blood glucose level is too high if MB is greater than MC. Therefore it is not rational, at any point
at which MB is greater than MC, for a patient to fail to intensify treatment.
Now suppose that at the current blood glucose level MB is less than MC. It is unreasonable to
pursue the treatment intensity that led to this blood glucose level because marginal costs to raise the
treatment intensity to this level were greater than marginal benefit. It is clearly unreasonable, from
a patient’s perspective, to continue intensifying treatment to lower blood glucose level at any level
at which MB is less than MC.
The alternative that remains is the blood glucose level at which MB equals MC. This is the blood
glucose level that we denote as the goal for treatment and symbolize by G*. A patient with an
original blood glucose level greater than G* should continue to intensify treatment until G* is
reached, and it would be unreasonable for a patient to accept intensified treatment to achieve a
blood glucose level lower than G*.
In terms of a comparison of G* to Gn and GI , the result is that the optimal blood glucose level for
the patient, G* , is greater than the minimum level which could be selected as a goal of treatment,
Gn , and greater still than the medically ideal level, GI. The typical patient would be unreasonable to
accept a treatment goal leading to a blood glucose level of Gn or GI . A rational and fully informed
patient will reasonably accept significant physical damage from a blood glucose level that is higher
than the medically ideal level.10
15
It is further demonstrated graphically in Figure 1 that G* is the optimal level of blood glucose for
this patient. At G*, MB equals MC as indicated by point L. At values of G lower than G*, the
marginal cost (MC) of intensifying treatment exceeds its marginal benefit (MB). Any movement to
a blood glucose level lower than G* produces a marginal net loss and is therefore unreasonable to
pursue. Accepting a level of blood glucose higher than G* is also unreasonable because foregoing
the intensified treatment which yields G* would produce marginal cost (MC) that exceeds the
marginal benefit (MB) of the intensified treatment.
II
We turn to several complexities involving the blood glucose level corresponding to G*. The first
of these complexities is that the level of blood glucose serving as the target for treatment may vary
from person to person. In Figure 2 we represent the relevant MC and MB relationships for two
[Insert Figure 2 about here]
persons: Samuel and Samantha. We center on the results that occur due to their differing MC. To
do this, stipulate that they have the same MB relationship, but Samantha’s MC is higher than
Samuel’s MC at any blood glucose level other than the initial level, Go. This difference in their
MC relationships means that Samantha considers it more costly than Samuel does to achieve what
is required to reduce her blood glucose level. For example, she might find exercise a greater
burden than does Samuel. Recall that the treatment target of blood glucose is the level at which
MC equals MB. In Figure 2 Samuel’s treatment target is shown as G*, and Samantha’s treatment
target is G* ′. Although Samuel and Samantha have the same initial blood glucose level and the
same MB relationship, Samantha’s greater MC results in her choosing a higher treatment target and
16
thereby less treatment than Samuel chooses. If they both achieve their treatment targets, Samantha
is left with a higher blood glucose level than Samuel.
Secondly, G* depends on a patient’s original glucose level, Go. With a lower Go, we expect G* to
be at a lower level as well. Consider Figure 3. The line labeled MC′ represents a different
marginal [Insert Figure 3 about here]
cost curve with an original glucose level at Go′. The curve MC′ is below MC based on Go because
at any blood glucose level reducing physical damage is less costly, and so we expect rational
treatment to continue to a blood glucose level of G*′. This is a lower blood glucose level than G*,
which is located using the higher Go.
A further complication arises. A third party may pay part or all of the billed medical treatment
costs. Such costs are part of the MC curve. Examine Figure 4. When the patient assumes less than
[Insert Figure 4 about here]
the entire cost, the MC curve of the patient is P. Given this, preventing damage has a reduced
marginal cost from the patient’s individual perspective. The result is a lower target glucose level,
G*′. Even if a third party is responsible for all of billed medical treatment costs, significant
marginal cost is likely to remain for the patient in the form of treatment costs such as time and
effort, out-of-pocket expenses, side effects, and so on.
A fourth complexity involves determination of the minimum level of blood glucose at which to
diagnose diabetes. Based on our economic theory of patient decision-making, there is no way to
determine a single level of blood glucose that should be used as the goal of treatment for diabetes in
all patients. It might be argued that the minimum blood glucose level at which diabetes should be
diagnosed is Gn or the level of blood glucose at which net benefit of treatment is zero. However,
17
like G*, Gn may vary from person to person based at least partly on the possibility that Go may vary
from person to person. If Gn is accepted as the blood glucose level used to diagnosis diabetes and
given possible variation in Gn , the blood glucose level at which diabetes is diagnosed should be
determined by careful use of empirical information. If such determination proves impossible, then
perhaps GI, the level of blood glucose considered ideal for health, is the best option.
Whether Gn or GI is chosen as the level at which diabetes is diagnosed, using either as the target
level for treatment is unreasonable. The target level for treatment, G*, is reasonably set by
carefully considering costs and benefits from the perspective of individual patients, based on solid
and reliable information provided mainly by physicians, in terms of physical damage and
significant associated costs.
III
An additional complication is that the professional calling of physicians is to eliminate symptoms.
The hazard is that physicians may wittingly or unwittingly exaggerate physical damage or
understate or hide costs. For example, a physician may describe an atypical patient who suffered
more damage than would be expected. Or the physician may fail to mention side effects that are
merely considered nuisances; or else he or she may point to unusual examples of patients who react
more quickly to treatment. This is improper. From an economic perspective, the patient is a
principal and the physician is an agent. Principals rely on the superior knowledge of agents in
order to make better judgments. An agent, such as a physician, who does not provide good
information deprives the principal of the opportunity to make better judgments and thus fails in his
or her fiduciary responsibilities.
The effect of physician misinformation is that from the patient’s perspective MC and MB could
18
both differ from what they would have been with better information. Figure 5 represents the effect
[Insert Figure 5 about here]
of misinformation about MB. MBA represents the actual marginal benefit from treatment of the
patient and MBP is the marginal benefit from the patient’s perspective based on exaggerated
information about damage from the disease. The effect is that the rational but misinformed
patient/principal accepts a lower blood glucose level, G*′, as the target for treatment.
Denying the patient good information about costs involves a different MC curve. This situation
is depicted in Figure 6 by plotting MCA (with good information) and MCp (with
[Insert Figure 6 about here]
information understating cost). Again the effect is that the patient accepts a lower blood glucose
level, G*′, as the target for treatment. Of course, if the physician understated MB or overstated MC,
the patient accepts a higher G* as the target for treatment.
IV
Our presentation offers a theoretical account of the reasons why an informed consent process
ought to include accurate information about costs and expected physical damage. It also gives a
theoretical basis behind respect for patient decision-making. Typically, bioethicists claim that
informed consent represents respect for a patient’s decision whenever the patient is decisionally
competent. Decisional capacity is a minimal requirement partly because it explicitly rejects any
special deliberating skills. From this point of view, it is easy to think of patient decisions as
conflicting with a patient’s best interest. However, informed consent is required even when such
irrationality is involved. This puts stress on health care professionals and bioethicists. By ignoring a
theory behind autonomous choices, health care professionals may be tempted to subvert, one way
19
or another, patient decisions because the decisions are thought to be unreasonable or harmful when
they depart from a medical ideal. Our theory of rational decision-making shows that this typically
is not the case and that what might appear to be a poorly conceived decision -- because physical
damage is accepted -- is likely to be a fully reasonable decision. Since autonomy is not the same as
rationality, an account that supports informed consent from the point of view of reasonableness, as
this economic theory does, strengthens respect for patient decision-making.
We are mainly exploring the patient’s perspective on desired treatment. Our analysis includes the
physician’s perspective only insofar as it identifies the diagnosis level as the point at which a
patient is expected to be symptom free. We put this at 126 mg/dl of blood glucose for diabetes
diagnosis. However, this is a simplifying assumption because physicians might set a diagnostic
point at a different blood glucose level that takes cost into account. For example, in 1997 the
“Expert Committee” explained that the diagnosis level was set without considering costs due to
inadequate data:
Determining the optimal diagnostic level of hyperglycemia depends ona balance between the medical, social, and economic costs of makinga diagnosis in someone who is not truly at substantial risk of the adverseeffects of diabetes and those of failing to diagnose someone who is.Unfortunately, not all of these data are available, so we relied primarilyon medical data.11
Our analysis indicates that taking such non-medical cost considerations into account tends to be
in harmony with the preferences of the typical patient. However, we also pointed out that marginal
curves do depend on patient evaluation of total cost, and that this is unknown in advance. While in
general setting a diagnostic level partly on the basis of cost is consistent with patient-based
allocation of resources, it might not be in individual situations.
20
V
In this section we examine and reply to possible objections that practitioners and bioethicists
might have to an economic analysis of patient decision-making. These objections tend to focus on
and intermingle three central issues: (1) An analysis of this sort is not realistic because patients do
not have well-formed cost and benefit curves, (2) Cost is not a crucially important consideration
when health is at stake, and (3) Such an analysis runs contrary to a physician’s highest moral
standard, not to harm.
We have relied on economic analysis to explain a patient’s rational decision-making in the
informed consent process. This perspective shows how a fully reasonable patient would take into
account costs and benefits. To do this we use marginal curves commonly employed in
microeconomics, but the non-economist may be skeptical. The approach we take presents
seemingly precise information about marginal damage and marginal cost, and purports to show
how individuals use such information to make decisions about treatment related to their blood
glucose level, or other health-status variables. The objection might be that patients do not have
such precise information and even if they did, they would not know how to apply it in a way that
would equalize marginal benefit and marginal cost.
However this may appear, it is a standard technique used by economists and is applied to
decision-making concerning virtually all goods. Even though frequently used in economic
analysis, economists do not believe that such calculations are always actually made. Instead they
believe that a reasonable person acts at least as if he or she calculated using marginal curves. This is
thought to be analogous to the way we might predict the shots of an expert billiard player. No one
would claim that the billiard player used complex mathematical calculations, but those calculations
21
could be used to predict and explain his or her expert shots. The billiard player acts as if he or she
did apply such calculations. Furthermore, the more a player’s actions depart from the results of
such calculations, the more we know that the player is not expert.12 Similarly, such graphs can
predict a rational patient’s perspective on treatment; the more a patient departs from this analysis,
the more we can suspect that the patient was not provided good information or that the patient is
decisionally incapacitated.
Microeconomic analysis is based on near truisms. As costs decrease, we expect people to
purchase more of a good or to pursue more of an activity. As benefits decline, we expect people to
purchase less. It makes intuitive sense that as treatment brings a patient closer to ideal conditions,
without physical symptoms, one would expect that additional benefits decrease and that additional
costs increase. When this happens, it would be reasonable to take into account such declining
benefits and increasing costs.
It may seem that most people want to achieve the ideal level of blood glucose for diabetes, or
more generally health status, regardless of cost. This is simply not the case. Most people do not
lead lives as if perfect health were all that matters. For example, many people engage in behavior
known to reduce health status; smoking, exercising infrequently, obesity, infrequent physical
checkups, and so on. Such people include many bioethicists and health care professionals. Their
actions may be explained in part by costs versus benefits.
Of course, it may also be the case that many people do not fully understand the benefits of
healthier life-styles. Our analysis can be used to show that when physical damage is
underestimated, patients would seek less treatment.13 Thus, the analysis points to the need for
effective information to individual patients and through social education. However, many benefits
22
are relatively well publicized, so lack of information cannot be the entire explanation of failures to
pursue ideal health. Part of the explanation is that people are evaluating costs and avoidance of
physical damage from an economic perspective.
From the patient’s point of view, it is typically reasonable to reject treatment that from a
physician’s perspective is ideal or nearly ideal. A physician might believe that the patient is
inappropriately risking death or disabling consequences, including possible blindness in the case of
diabetes. It may appear that the responsibility not to harm the patient would involve a moral
obligation to try, in one way or another, to convince the patient of the need for fully effective
treatment. If this obligation simply means providing full, accurate, and objective information, we
would agree. However, if the physician’s point of view entails paternalistic, selective, or
misleading presentation of information about costs and benefits, used to persuade about the need
for more intensive treatment, then such an attempt is at least morally suspect.
Our analysis calls for physicians to support and respect patient decision-making that may accept
some physical damage. This result seems to conflict with the requirement to prevent harm. The
obligation to prevent harm is misunderstood if it is thought of simply in terms of patient symptoms.
This view would be too limited because it does not take seriously the patient as a person with
interests and preferences. Harm is appropriately defined as a setback to an interest.14 This is the
concept of harm that is relied upon by Tom L. Beauchamp and James F. Childress in their well-
known book, Principles of Biomedical Ethics. They say: “... we will construe harm only in the …
sense of thwarting, defeating, or setting back the interests of one party by causes that include self-
harming conditions as well as the … actions of another party.”15 Aside from avoiding symptoms,
people have an interest in their time, their financial resources, in the amount of pain and suffering
23
they endure in order to overcome the physical damage of a disease. When all of these are factored
in, the point at which MB from diabetes equals the MC of its treatment best represents the
prevention of harm. A patient who is treated to a different level is harmed because his or her
interests are thwarted. While physical damage may be avoided, the patient incurred costs above
what he or she found to be reasonable. By treating to the level at which MC equals MB, the
physician takes seriously the personal decision-making of the capable patient, who is, after all is
said, best able to evaluate the reasonableness of treatment from the perspective of his or her overall
interests, given the provision of accurate and full information.
Treating to the level of blood glucose at which MC equals MB is also the level that would be
required by beneficence.16 Doing good for the patient involves respect for all the reasonable
interests of the patient. Attempting to convince a patient to go against his or her interests -- as
expressed in marginal curves derived under adequate knowledge -- substitutes the physician’s
evaluation of benefit for the patient’s. The patient is the one who suffers the damage and bears the
costs.17 The physician might, on the other hand, have an economic interest in treating the patient to
the point of eliminating all physical symptoms. Such intensive treatment may benefit the
physician’s economic interest while it harms the patient.
Sometimes there is genuine conflict between patient autonomy as expressed in the informed
consent process and beneficence: a patient might unreasonably use his or her right to informed
consent to reject helpful treatment. Accordingly, there would be a conflict between the moral
requirement to protect and enhance autonomy and the responsibility to protect and help the patient.
Under such conditions, it may be morally appropriate to “direct” the patient away from a harmful
path.18 However, one crucially important implication of our analysis is that physicians ought to use
24
caution in drawing the conclusion that a patient is acting unreasonably by willful acceptance of
physical damage. A patient who wants less than an ideal treatment level, or who acts in a
noncompliant way, may be accurately representing his or her best interests. Manipulation used to
persuade the patient to accept unwanted treatment not only interferes with autonomy, but also with
beneficence and non-harm.
Another possible objection to our analysis is that it overemphasizes monetary costs. First of all,
monetary values reflect evaluation of real resource costs. Part of the MC curve involves actual cash
considerations, even if medical treatment is largely paid by insurance. Monetary costs, including
out-of-pocket expenses, mean that other desired goods, some of which, for example, education,
contribute to good health, may no longer be affordable. Also, the time and effort involved means
that other valued activities cannot be pursued. Finally, physical costs, such as those suffered as a
result of side effects of medication, exercise or diet, are represented in monetary units to allow
“apples-to-apples” comparisons. Despite that monetary representation, these are real burdens, and
the patient is typically best at evaluating these burdens.
Defending decisions on the basis of cost and benefit considerations might be thought of as
discriminatory. Suppose poorer people reasonably accept treatment at a level that would involve
more physical damage than would a wealthier person. Under such conditions, it might seem unjust
not to treat to a more ideal level, or at least unjust not to use persuasion to convince a poorer patient
to accept additional treatment. This conclusion, however, also involves an apparent injustice. It
treats the poorer patient as incapable of representing his or her own interests, and overlooks the fact
that the treatment might not be viewed as optimal by the poorer patient.
The view that the poorer patient who reasonably accepts treatment of diabetes to a level other
25
than the ideal glucose level is incapable of representing his or her interests is easily extended to
virtually all patients. Wealthy patients might experience greater opportunity costs, and so might
reasonably reject extra visits to the physician’s office or might not be willing to spend extra time
exercising. Middle class patients might believe that resources are better spent on other goods and
services, and might reject the pain and suffering that accompanies treatment. Thus, coercive
persuasion might appear proper from the physician’s perspective in virtually all cases.
A poorer patient may be harmed by withholding good information or by undue coercion used to
secure compliance with the physician’s goal. Regardless of a person’s economic status, his or her
autonomy is violated by an attempt to support treatment that is not in the patient’s interest.
Coercing any reasonable person to be treated against what would be their adequately informed
preference amounts to harm and lack of respect. It is unfair to argue that poorer people generally
are not reasonable. This is true even if poorer people are more likely to accept a higher level of
physical damage.
On the other hand, we might decide that socially speaking, avoiding harm is an important
consideration and that efforts to provide partial or full monetary compensation, at least for billing
costs and medication, should be made. Society might base this decision on “commodity
egalitarianism” or another redistribution criterion. This may be viewed as a way to protect, in
particular, poorer patients. In effect, making health care insurance fully available would involve, as
we showed, a MC curve that is different from what it would be without insurance. In advanced
countries other than the United States, all or virtually all people are insured so that they incur less
economic loss as a result of treatment. A system that equalizes some of the monetary burden of
treatment, including out-of-pocket and direct billing costs, will, at least ideally, permit marginal
26
cost curves based solely on other burdens of treatment. However, such other treatment costs as lost
wages, pain and suffering, and waiting time are still incurred. The existence of these other
treatment costs means that, although billing costs are excluded, the point of equality between MC
and MB is likely to be at a treatment level that accepts physical damage. Even so, equal insurance
would protect poorer patients and would free rational decision making from the burden of billing
and medication costs.
We turn to a final issue: surrogate decision-making for those who lack capacity. If the patient is
genuinely incapable of making an informed decision, a surrogate decision-maker should decide on
the appropriate treatment. If the patient did not previously indicate what he or she would prefer,
then the surrogate should decide based on the best interests of the patient.19 Under these
circumstances, one does not have access to marginal cost and marginal benefit data evaluated from
the patient’s perspective. In fact, given that the patient lacks decisional capacity, the patient would
not incur many of the costs involved in treatment. When a decision is made according to the best
interests of a patient without decisional capacity, the surrogate should attempt to balance expected
gains against the real costs the patient faces, including side effects and possible resistance to the
treatment regimen. If the best interests of the patient are considered, it is likely that the proper
treatment point accepted by the surrogate will diverge from the position considered ideal in terms
of expected physical damage.
VI
Economic analysis has mainly been used in bioethics to explore macroeconomic issues involving,
for example, health care reform. This presentation uses economic analysis in a new way by
applying it to a central concern in clinical ethics. We believe that our viewpoint suggests further
27
advantages from using an economic perspective. For example, we did not investigate externalities,
such as benefits and burdens to family members. An economic perspective on this issue might
reinforce some of the claims of those who argue for a notion of autonomy that extends to the
family. Our hope is that the fruitfulness of an economic perspective will broaden the
interdisciplinary nature of clinical bioethics.
28
BIBLIOGRAPHY
Annas, George, The Rights of Patients. (Carbondale: Southern Illinois University Press, 2004).
Beauchamp, Tom L. and Childress, James F., Principles of Biomedical Ethics. (Oxford: Oxford
University Press, 5th edition, 2001).
Feinberg, Joel, The Moral Limits of the Criminal Law: Volume One: Harm to Others. (New
York: Oxford University Press1984).
Folland, Sherman, Goodman, Allen C., and Stano, Miron, The Economics of Health and Health
Care. (Upper Saddle River, NJ: Pearson Prentice Hall, 2004).
Friedman, Milton, Essays in Positive Economics. (Chicago: The University of Chicago Press,
1966).
Gert, Bernard, Culver, Charles M., and Clouser, K. Danner, Bioethics: A Return to Fundamentals.
(New York: Oxford University Press, 1997).
Mankiw, Gregory, Microeconomics: Theory & Applications. (New York: Thomson Southwestern
Publishers, 3rd edition, 2004).
Rawls, John, A Theory of Justice. (Cambridge, Mass.: Harvard University Press, 1971).
The Expert Committee on the Diagnosis and Classification of Diabetes Mellitus. “Report of the
Expert Committee on the Diagnosis and Classification of Diabetes Mellitus.” Diabetes Care. 20
(7), July 1997, pp. 1183-1197.
29
30
31
32
33
7 When we use “Gn” as a goal of treatment, we are referring to a general criterion for a patient.
This goal would be at a higher blood glucose level than GI. Determination of that level would
depend on careful empirical study.
8 The desirable treatment level, for an individual patient, is not typically known in advance.
Economists often assume full knowledge. Under this assumption, the desired treatment level would
be known. However, many variables in treatment cannot be predicted with accuracy. Thus, the
desired treatment level may be found by trial and error as treatment progresses. Then, for diseases
such as diabetes, maintenance rather than cure is appropriate. For simplicity, we shall continue to
present our analysis as if a patient had full knowledge. We also assume that achieving a lower
glucose level is dependent on treatment and that more aggressive treatment can typically achieve a
lower level.
9 For a helpful presentation of this type of analysis, see Gregory Mankiw. 2004. Microeconomics:
Theory & Applications, 3rd Edition. New York: Thomson Southwestern Publishers.
10 Our paper centers on a rational decision-making. Of course, many decisions are not rational, for
example, due to fear, a desire not to optimize but rather to achieve just enough, or because of
frequent changes in preferences. Our view demonstrates that a rational patient will accept a lower
level of treatment than that which would eliminate physical symptoms. Irrationalities may increase
or decrease the desired level of treatment. Irrationalities may be important in dealing with
34
individual patients; nevertheless, the viewpoint from the perspective of a rational patient shows that
accepting less than ideal treatment may be fully rational. This should be kept in mind when
evaluating irrational decision-making.
11 The Expert Committee on the Diagnosis and Classification of Diabetes Mellitus. p. 1190.
12 This analogy is borrowed from Milton Friedman. 1966. Essays in Positive Economics. Chicago,
The University of Chicago Press, p. 21.
13 If damage were underestimated, the MB curve would be lower. With the same MC curve, the
point at which MB is equal to MC would be at a higher blood glucose level.
14 Joel Feinberg. 1984. The Moral Limits of the Criminal Law: Volume One: Harm to Others.
New York, Oxford University Press, p. 34. After defining harm as a setback to an interest,
Feinberg points out that: A person’s “interest … consist of all those things in which one has a
stake….”
15 Tom L. Beauchamp and James F. Childress. 2001. Principles of Biomedical Ethics, Fifth
Edition. Oxford, Oxford University Press, p. 193.
16 Beneficence is at the heart of one of Beauchamp and Childress’ four principles in Principles of
Biomedical Ethics, Fifth Edition. Their other principles focus on autonomy, nonharm, and justice.
We believe that the overall weight of their theory, often called “principlism,” would support our
view. We already dealt with nonharm and beneficence (or doing good), and much of our
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presentation deals with autonomy. The issue of justice may enter in terms of offering insurance to
the uninsured, which we will briefly explore.
17 There are instances in which the treatment level chosen by a patient yields benefits or costs to
third parties, e.g., in the case of contagious diseases. Economists call these third-party effects
“externalities.” We are not considering this complication in our analysis.
18 Physicians may influence patients with inaccurate information in a variety of ways. George
Annas, 2004, in The Rights of Patients, Carbondale, Southern Illinois University Press, p. 117,
points out that physicians differently use words, such as rare, almost certain, very likely, probable,
almost never and the like to describe outcomes. Misleading terminology is one way to alter
behavior.
19 This is a basic position in bioethics and in U.S. law. For example, see Beauchamp and Childress,
pp. 98 – 103.
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