• Thinking about rationing

    Not long ago I was on the prowl for a comprehensive article on health care rationing, what it means, how it influences policy consideration, and so forth. Well, all I had to do was wait. My Boston University colleague Alan Cohen has published one in the most recent issue of Inquiry. Here are a few passages I highlighted.

    On first- and last-dollar rationing:

    First-dollar rationing has been the dominant form of rationing in this country, with both public and private payers limiting access to basic services and primary care—either by denying coverage or by imposing high deductibles and coinsurance—even as they pay for more expensive tertiary care, often at the end of life []. In most other industrialized nations, last-dollar rationing has been the norm, with consumption of high-cost services limited via wait lists and constrained supply of costly technology, while universal coverage assures access to basic primary and secondary care. The ACA aims to reduce first-dollar rationing by promoting access to primary care and preventive services. […] First-dollar rationing makes little sense if we want to obtain the highest value for our long-term investment in health care. Instead, first-dollar coverage of primary care andevidence-based preventive services should be the norm, as the ACA strives to attain. Rationing, then, should apply to services that are wasteful or non-beneficial, and in this respect, last-dollar rationing makes more sense because of diminishing marginal returns on expensive tertiary care, especially in endof- life situations.

    On access limitations in the context of waste:

    Brody (2012), for example, offers two ethical arguments for avoiding waste—that patients should not be deprived of useful medical services so long as money is being wasted on useless interventions, and that useless tests and treatments cause harm through false-positive results and complications. Thus, wasteful, non-beneficial medicine imposes opportunity costs for patients in need and also conflicts with the medical maxim of ‘‘First, do no harm.’’

    On entitlement to technological advances and price barriers:

    Not only have we fostered a cultural view that ‘‘death should be avoided at all cost,’’ but we seem to have cultivated a growing sense of entitlement to technological advances as they diffuse into medical practice. Finally, because so many Americans still fail to realize that we ration care through price barriers, the powerful anti-rationing rhetoric of today effectively twists an ‘‘inconvenient truth’’ into a convenient lie for political and/or financial gain.

    On the need for more than just price barriers:

    As Baicker and Chernew (2011) point out, the economics of financing Medicare is complex. Without even a modest tax increase, it will be difficult to finance the program in the long run, and the bitter Congressional clash over Medicare payment cuts to providers seems inherently myopic. Any short-term savings wrung from Medicare or Medicaid with such blunt instruments is likely to come at the expense of both quality and access to care. And no one knows for certain whether the payment and delivery system reforms of the ACA will ultimately be successful. Given these uncertainties, rationing based on factors other than price and ability to pay will be required to curtail future spending. Are we, as a nation, willing to adopt such rationing schemes?

    Our blind spot:

    We consider ourselves a generous and caring people who are among the first to respond with humanitarian aid in times of global crisis or disaster (e.g., the 2009 Haitian earthquake and the 2011 Japanese tsunami). But we also possess a curious blind spot that makes us neglect our own—be they inhabitants of New Orleans and the Gulf coast following Hurricane Katrina or the millions of uninsured citizens in our midst.

    The article is worth a full read. Unfortunately, it is gated. @afrakt

    Share
    Comments closed
     
    • Let me give you another:

      “Remember the joke about the man who asks a woman if she would have sex with him for a million dollars? She reflects for a few moments and then answers that she would. “So,” he says, “would you have sex with me for $50?” Indignantly, she exclaims, “What kind of a woman do you think I am?” He replies: “We’ve already established that. Now we’re just haggling about the price.” The man’s response implies that if a woman will sell herself at any price, she is a prostitute. The way we regard rationing in health care seems to rest on a similar assumption, that it’s immoral to apply monetary considerations to saving lives — but is that stance tenable?”

      http://www.nytimes.com/2009/07/19/magazine/19healthcare-t.html?pagewanted=all

    • Yes, yes, yes!

      This is the best, most concise explanation of something that I’ve thought for a long time.

      First dollar rationing through a Ryan Plan-style system of fixed premium support or increased policy deductibles would likely give us the worst of both worlds. Somebody who has a $5,000 deductible plan becomes at least somewhat less likely to get their children vaccinated or to visit the ER when they experience chest pains. This is not reducing costs as much as it is kicking the can down the road. Moreover, somebody with late stage terminal cancer will have long since exceeded their out of pocket threshold and thus have no financial incentive to forgo a 4th round of chemotherapy or some other drastically expensive and statistically ineffective treatment option.

    • Another complication in the way we think about rationing in this country is that we place a lot of emphasis on the moral right of rescue. This is your duty to throw a drowning person a rope. The problem with this organizing principle for medical care is that, taken to extreme, it leads to the situation where a we consider a terminal cancer patient to have a greater moral right to health care than a child who needs a measles vaccine. We end up spending the most resources on those in greatest (acute) need regardless of long-term efficiency or outcomes.

      This is not to argue that we should ignore the cancer patient and let her die alone and in pain. However at some point we need to consider the efficiency of resource use too. Our health care system overwhelmingly organized (both publicly and privately) around rescue is not well-positioned to do that. In large part I think because it does reflect our explicit and implicit moral choices. EMTALA is only the most obvious example of the prioritization of rescue.

    • “As Baicker and Chernew (2011) point out, the economics of financing Medicare is complex. Without even a modest tax increase, it will be difficult to finance the program in the long run, and the bitter Congressional clash over Medicare payment cuts to providers seems inherently myopic. ”

      This quote nicely summarizes the problem. Most people seem to think that the only way out is to have a tax increase so that we can throw more money into overpriced and unnecessary services. They ignore the evidence from the rest of the developed world where they have health systems which deliver better quality care to more people at a much lower cost than the US. They do this not by rationing care to patients but by rationing payment for overpriced and ineffective treatment.

    • I’m of the opinion that no politician (or policy wonk) is actually trying to kill someone else’s grandma. But if we’re discussing political rhetoric, and thinking about the first quote here on first- vs. last-dollar rationing, it seems to me that expecting people to pay considerably smaller sums to cover their primary care visits is far less similar to the active pursuit of killing someone than accepting last-dollar rationing and forcing third parties to decide which forms of tertiary, life-saving care will be covered by Medicare and for whom. Let’s assume no one is trying to kill anyone. Still, wouldn’t the decision to ask everyone to pay a few hundred (or maybe thousand, in rarer cases) dollars to cover their own preventive/primary care be more humane than expecting someone unfortunate enough not to be granted coverage for tertiary care at (what now has become) the end of life to cover tens or even hundreds of thousands of dollars? Clearly, neither is ideal, but I think I would be more comfortable with the former option if given the choice.

      Aaron or Austin, I’d love to hear your thoughts.

      • Jacob, I just want to clarify something you said:

        “…it seems to me that expecting people to pay considerably smaller sums to cover their primary care visits is far less similar to the active pursuit of killing someone than accepting last-dollar rationing and forcing third parties to decide which forms of tertiary, life-saving care will be covered by Medicare and for whom.”

        The argument for last dollar rationing isn’t suggesting that life-saving care should be denied to people, it’s that much of the care that our medical systems provides to the elderly and terminally ill isn’t actually life-saving at all. Quite the contrary, much of it is statistically unlikely to do much of anything for them.

        We all have a family member or close friend who held on to their elderly parent or grandparent too long, and had them hooked up to feeding tubes or breathing machines, pushed them to undergo a 3rd or 4th round of chemotherapy after the first ones had failed, or had them spend their final weeks in the hospital or ICU rather than in a hospice center or at home. In these situations, tens of thousands, if not hundreds of thousands, of dollars are spent keeping the individual alive in only the strictest mechanical sense, and only for slightly longer than they might otherwise live.

        The idea behind last-dollar rationing is that there is a tradeoff at play in these situations. When we spend $100,000 keeping one individual alive on technical terms only for a short time, we forgo spending it somewhere else that might have a far greater impact on health, wellness, and life expectancy for a greater number of individuals.

    • Any discussion of resource allcation between Basic Health Needs and Complex Health Needs ultimately hinges on the most pervasive conflict of interest that characterizes our nation’s healthcare industry. That is, the institutions that pay for healthcare, the “economic mandate,” also largely define the benefits that are eligible for the reimbursement of this healthcare, the “social mandate.” To consider the realities of resource allocation including its ethical implications, a semi-autonomous and nationally sanctioned institution would be required. The internal character of Congress is the main stumbling block. Does anyone think that the historical perogative of Congress would ever give up the control of its own health insurance benefit sructure to an outside institution? And so, our nation’s impending bankrupcy is mired in political paralysis largely over its cost of healthcare! To sponsor meaningful reform, I propose “National Health,” as described at http://nationalhealthusa,net/