Although many physicians still honor the tradition and general sentiments of the Hippocratic oath, as a practical matter, the oath is largely ignored in modern medicine. Yet one of its legacies is the injunction that a physician, if unable to heal or cure, shall do no harm. To some physicians, the injunction implies that they should do everything possible to ensure the physical well-being of their patients. Or, given that almost everything in medicine is probabilistic, it implies to some that they should do everything that might help the patient. Many patients and policymakers have the same expectations. In economic terms, that means that medical science is required by medical ethics to devote resources to the healing and care of patients until such point that the marginal effect on health of the last dollar spent approaches zero. Were we to follow this injunction rigorously, we easily could spend our entire gross national product on health care many times over.

What will replace the old medical ethics? American physicians are increasingly pressured to adopt the newer ethics of cost-benefit analysis. They are supposed to compare the health value of a procedure with its monetary cost. In effect, the new ethic says: "Perform procedures until the marginal health benefit is greater than or equal to the marginal monetary cost." The new ethic results in less medical care, but it ensures that whatever we get is worth the resources it costs.

The standard objection to cost-benefit analysis is that it is impossible to compare the value of health (or of life) with the value of money. But that objection is weak. Each of us makes choices between health (and safety) and money every day, and most of us are comfortable doing so. A larger automobile is safer, but it costs more money. Walking is safer than driving, but it takes more time, and, for most of us, time is money. Indeed, we are constantly balancing health and safety against money, and we don’t always come down on the side of health and safety. A stronger objection is that although we may feel comfortable making our own choices between health and money, most of us are uncomfortable making choices for others. The obvious solution is to let each individual choose. If a reasonably well-informed patient makes a choice between health care and money, then we presume the patient will choose the option that was the higher value for him or her. But for individuals to make such choices, they have to have the option of keeping the money. In today’s system, each of us makes choices between our own health care and somebody else’s money. Real cost-benefit analysis demands that we choose between health care and our own money.

If we deny individual choice and insist on collective decisionmaking about health care resources, then we are forced to use a different technique. Health economists must judge (or guess) the trade-offs that an average individual would make. Such cost-benefit analysis then forces everybody else to make the same decision, even though individual preferences differ radically.

Physicians and health administrators for most of the post-World War II period were encouraged to believe that money should not even be considered in making medical decisions. Today, they are being told that money should always be considered. Moreover, because bureaucrats are usually technocrats, it is only natural that they will gravitate toward a cost-benefit standard - a collectivist standard not always in the best interest of individual patients.

Because cost-benefit analysis is complicated, because physicians are not trained in it, and because most health policy bureaucracts do not trust physicians anyway, few advocates of a collectivist approach to health care suggest that physicians should implement it. Instead, they envision that technocrats will decide what procedures physicians will use under various circumstances - perhaps with the aid of the computerized protocols. Under this approach, physicians will make far fewer ethical decisions because they will make far fewer medical decisions.

Although cost-benefit studies are routinely done by economists in and out of government in every policy field, there appear to be very few programs that are actually run on the basis of such analyses. The reason is that politics always interferes. An apparent exception was the federal government’s program to administer swine flu shots to the elderly - a program that resulted in unnecessary deaths.

At the individual level, cost-benefit analysis is simply a fancy name for routine decisionmaking. The old medical ethic led physicians to encourage patients to ignore monetary costs and focus only on health care benefits. What physicians should do is encourage patients to consider both. In an ideal system, the physician would act as adviser to patients and help them to understand the probabilities, the medical consequences of various outcomes, and the costs of various procedures. Ideally, physicians would help patients choose between money and health care and thus increase the odds that patients would choose the option they value most highly.