Health Care Rationing: Doing It Better in Public and Private Health Care Systems
By Alan Maynard
Journal of Health Politics, Policy and Law, December 2013
Abstract
All public and private health care systems ration patient access to care. The private sector rations access to consumers who are willing and able to pay. The poor and disadvantaged have limited access to care and inadequate income protection. In public health systems, care is provided on the basis of “need,” that is, the comparative cost-effectiveness of competing treatments. This results in patients being deprived of care if treatments are clinically effective but not cost-effective. Rationing health care is ubiquitous. In both types of systems physicians have discretion to deviate from these rationing principles. This has created inefficient variations in clinical practice. These are difficult to resolve because of the lack of transparency of costs and patient outcomes and perverse incentives. The failure to remove universal inefficiency in a period of economic austerity sharpens awareness of rationing. Hopes of greater efficiency are largely faith based. Competing ideologues from the left and the right continue to offer evidence for free solutions to long-established problems. Inefficiency is unethical, as it deprives potential patients of care from which they could benefit. Reducing inefficiency is essential but difficult. The universal challenge is to decide who shall live when all will die in a world of scarce resources.
From the Overview
In all countries there is a reluctance to use the word “rationing.” Policy makers and politicians prefer terms such as “prioritization” and “resource allocation.” Call it what you will, rationing in health care is ubiquitous in public and private health care systems. The latter ration by consumers’ ability to pay, and “success” is related to physicians and other providers making a good living. Public health care systems, in principle, ration in relation to need or comparative cost-effectiveness; in practice, prioritization is determined by physicians’ providing treatments that most satisfy the physicians.
Productivity variations exist throughout the manufacturing and service industries. Indeed, these variations drive innovators to act smarter and capture market share from rivals. Public and private health care markets are remarkable in that innovation tends to increase costs rather than reduce them, as has happened in information technology and other industries. The causes of this difference are debated and include the power of the medical profession (physicians’ monopoly of many areas of activity where efficient substitutes exist), third-party pays (weak budget caps), and perverse incentives confronting providers and consumers (moral hazard). Mitigating problems such as these could ease rationing constraints but would not remove them.
The failure of health care systems to measure and manage these problems with greater transparency and improved incentive structures will result in rationing becoming more explicit. The hope is that the consequent debate about who will die and who will live in what degree of pain and discomfort will not be dominated only by emotion (e.g., hysteria about “death panels”) but by evidence of cost-effectiveness produced by robust HTA programs (health technology assessment) and the transparent judgments of clinicians using this information. The policy priority, as efficient HTA and P4P (pay for performance) schemes increasingly influence rationing choices, will be to ensure that this is seen by the public as improving patient safety and value for money for insurers and taxpayers, and not merely seen as depriving patients of care from which they might benefit marginally but which societies choose not to fund, either by NHS rationing or US rationing by restrictive benefit packages and poor access.
http://jhppl.dukejournals.org/content/38/6/1103.abstract
Comment:
By Don McCanne, M.D. “All public and private health care systems ration patient access to care.” Professor Alan Maynard of the University of York, with his characteristic academic objectivity, describes the differences in public and private approaches to health care rationing. Public health care systems ration access in relation to medical need, whereas private systems ration access based on willingness and ability to pay. In public systems, success is measured by the satisfaction of physicians with their ability to meet the medical needs of their patients, whereas in private systems, success is measured by the ability of physicians to make a good living. Both public and private systems experience inefficiency. Since the rationing that results from inefficiency deprives some patients of care that they should have, tolerating inefficiency is unethical. When you compare the public British system with the largely private system in the United States, it is clear that our much greater inefficiency results in an insufferable level of ethical compromise. We do ration far more than the British; we just don’t see it since our victims of rationing are not even allowed a position in the queue. Why do we tolerate this? A clue might be found in Alan Maynard’s words in “The Public-Private Mix for Health” (The Nuffield Trust, 2005): “As societies spend increasing proportions of their rising GDP on healthcare, more realism about its productivity in terms of improving the health of the population is needed. But this is not in the interest of the media, politicians and commerce. Promising miracles increases their income and power!”
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