A healthcare prescription that’s hard to swallow Rationing may be the only way to ensure that access for all remains affordable
By Henry Aaron
Los Angeles Times
January 30, 2006
Something needs to be done, but no one seems quite ready to come forward with a solution. The only thing American politicians all agree on is this: The United States must at all costs avoid healthcare “rationing.” One after another, they step forward to deplore this much-hated approach, insisting they will fight off efforts to deny the insured any beneficial service that their insurance covers.
But it’s too late for that. The truth is that sensible rationing may be the only way to make sure that fair access to healthcare for all remains affordable. The U.S. can no longer afford to offer every available service no matter how high the cost or how small the benefit to the patient.
Intelligent healthcare rationing – limiting the availability of care that costs society more to produce than it is worth to patients – is not a horror to be avoided. It’s a regretfully necessary limit to sustain fair access to healthcare that is worth what it costs.
Some people argue that simply boosting deductibles will encourage consumers to squeeze out low-benefit care because they won’t want to spend their own money without a high chance of a good outcome. Unfortunately, this approach is being greatly oversold. First, patients whose healthcare costs more than $4,000 a year consume roughly 80% of all health services. They are, of course, the sickest – and their doctors, acting in good faith, prescribe tests, procedures and drugs, most of which are demonstrably beneficial but some of which have only a small chance of helping the patients much, if at all. These very sick patients are in no position to decide which treatments are cost effective, which are likely to work and which are probably wasteful. So “consumer-directed healthcare” – a clever marketing label for high-deductible insurance that makes the patient pay the first $4,000 – won’t do much to curb high-cost, low-benefit treatments for those patients.
Other analysts believe that computerizing healthcare records and billing would reduce paperwork and costly medical errors. But careful estimates put the savings at no more than about 3%.
The kind of rationing that is necessary will require steps that may now seem unimaginable to most Americans and to elected officials, including restrictions on the purchase of costly equipment, caps on hospital budgets and well-enforced protocols for using treatments that have been proved effective for various conditions. Failure to ration, however, will mean that the cost of caring for the aged, disabled and poor will require astronomical tax increases – and that working Americans will have less money to spend on anything other than healthcare. Employers will find it increasingly unattractive to sponsor coverage for workers, and workers will refuse increasingly costly coverage. What Winston Churchill said of democracy may also apply to healthcare rationing: the worst system – except for all the others.
Comment: By Don McCanne, M.D.
“Ration refers to equitable division in limited portions of scarce, often necessary, items.” (The American Heritage Dictionary of the English Language, Fourth Edition)
Henry Aaron’s leading message of the past decade is an important one. Health care spending has reached a level that we must now consider “limiting the availability of care that costs society more to produce than it is worth to patients.” “Rationing” may not be quite the appropriate term since health care in the United States is not a scarce resource, though our distribution is limited based on our flawed system of funding care. Limiting access based on ability to pay does make it a somewhat scarce resource for those who cannot afford to pay for their care.
Although Aaron’s message on controlling spending on wasteful high-tech excesses is an important one, his message on how we do that seems muddled, if not obstructionist. Single payer activists are certainly offended with his pompous assertion that “no one seems quite ready to come forward with a solution.” Also, he does not move reform forward when he attacks a seminal article on administrative waste as “questionable answers to a questionable question.”
The single-payer model of national health insurance would accomplish much of Aaron’s goal, including measures that he explicitly endorses: budgeting of capital improvements, global budgeting for hospitals, and increased use of evidence-based medicine. In spite of his attack on the numbers, he does concede that much is wasted in excess administrative costs, another potential source for controlling spending. Policy experts are already aware of the other effective single-payer methods of controlling costs while improving quality and value, so they won’t be repeated here.
One caveat: We cannot allow Aaron’s use of the term “rationing” to be used by the opponents of single payer to attack our model. It has been demonstrated repeatedly that improving use of health care resources prevents excessive queues. Also, a single-payer purchaser is in a position to demand value for new innovations. That means only that worthless technology would be rejected. The pharmaceutical and high-tech industries will never walk away from the $2 trillion that we are spending on health care, but they are going to have to show us that their advances provide value.
Yes, all systems ration care, but some systems use their resources better than others. With our inhumane method of rationing by ability to pay, we do the worst. By switching to a single payer system of allocating our $2 trillion, we would change the dialogue on reform from that of “rationing” to that of “rational.”