By Howard Bauchner, M.D., Editor in Chief, JAMA
JAMA, Editorial, February 13, 2019
The modern era of medicine began in the 1960s. Health care coverage expanded with the passage of Medicare and Medicaid and the increasing availability of employee-based health insurance. Scientific and clinical advances began to occur at a far more rapid pace. Physicians became more specialized and began to focus on acute care dominated by cardiovascular disease, diabetes, and cancer rather than infectious diseases, and there was increasing recognition of the importance of chronic diseases. With more data available, it became possible to measure variation in the delivery and quality of care, along with disparities and rationing in the provision of care. Health care costs per person more than doubled between 1960 and 1970, beginning their 5-decade increase.
Rationing and cost of care are inextricably linked, although measuring the amount and extent of rationing and defining rationing is difficult. There are many types of rationing, including rationing by access (type of insurance), by cost (out-of-pocket expenses), by restriction (the service is not available or paid for by a third party), or by long waits (Canada and parts of the United States). Broadly, rationing refers to approaches that are used to allocate resources and potentially restrict access to effective therapies. Rationing is linked to poverty, race, and ethnicity, and it inevitably leads to differences in the care that certain groups of individuals receive.
Rationing of care often is part of the larger discussion of disparities in health care. Healthy People 2020 defines a health disparity as “a particular type of health difference that is closely linked with social, economic, and/or environmental disadvantage. Health disparities adversely affect groups of people who have systematically experienced greater obstacles to health based on their racial or ethnic group; religion; socioeconomic status; gender; age; mental health; cognitive, sensory, or physical disability; sexual orientation or gender identity; geographic location; or other characteristics historically linked to discrimination or exclusion.” Disparity in health care is often used as an inclusive term, including differences in health outcomes, which is not only a product of access to treatment but also social determinants of health. Social determinants of health, for example, the quality of education and housing, are largely outside of the general focus of the health care system, although that is changing with an increasing commitment to population health and renewed interest in the inextricable link between social determinants of health and health outcomes. Disentangling and differentiating among health disparities, health outcomes, rationing of care, health equity, population health, and social determinants of health represent important challenges.
This decade and the next likely represent the postmodern era of medicine. Big data, machine learning, precision medicine–based therapies, and the genetics revolution, including rapid sequencing of the genome and manipulation of both the germline and somatic cells, suggest that the scientific advances to emerge may be as significant as the expansion of health care coverage and other medical advances in the 1960s and 1970s. The expansion of health care coverage brought with it the recognition of health care disparities and the rationing of health care. An important question is whether these new scientific advances, with their attendant cost, will lead to further rationing of care.
Following the passage of the Affordable Care Act, much of the national discussion was focused on expansion of coverage and value in health care, but new concerns about rationing of care are emerging. For instance, more than 3 million individuals in the United States have hepatitis C infection. Who has been treated and who has not been treated? Will the remarkable discoveries such as CART-T cell technology or cancer immunotherapy be widely available, or rationed based on the ability to pay? Who has had access to transcatheter aortic valve replacement and who has not? With a cure for sickle cell disease in reach, will this treatment be developed and then become widely available, similar to new treatments for cystic fibrosis, or will inadequate research funding delay the development of a possible cure? How will decisions be made about the use of extremely expensive care during the last years of life? As more successful treatments become available for rare diseases, at very high cost, will all individuals benefit, or just a select few?
The cost of health care continues to increase, now approaching 18% of the US gross domestic product. Health care expenditures consume approximately 30% of many state budgets, and this does not include the cost of health care paid by states for their own employees and via pension benefits. Even at the estimated 4% to 5% yearly increase in health care costs for the next decade, this projected increase exceeds the rate of inflation. As the number of individuals working in health care increases, any reduction in the ongoing increase in cost will be nearly impossible. Moreover, some highly prevalent conditions will continue to drive increases in health care costs. For instance, the obesity epidemic will inevitably increase health care expenses, with its associated complications affecting the endocrine, cardiovascular, and musculoskeletal systems, including hip and knee replacement operations at younger ages, and often necessitating subsequent joint replacement procedures.
The United States is mired in a great philosophical debate. Is health care a right or a privilege? In part this debate is embedded in the historical, underlying sociopolitical discourse in the United States — is this a nation that champions individual rights and achievement at the expense of the common good? This philosophical debate plays out in health care. Rationing of health care is likely always going to occur, but for those who maintain that health care is a privilege, attention to rationing and attempts to ensure that rationing is minimized may not be a priority. Yet, even for those who assert that health care is a right and that health care coverage should be provided to all individuals in a more just and fair way, unless the relentless increase in the cost of health care is addressed, rationing of health care is likely to become more common.
Identifying approaches to mitigate the increase in health care costs has been elusive. Debates about waste in health care, prices of drugs and devices, volume, fraud, defensive medicine, inappropriate testing, and misaligned incentives have been ongoing for more than a decade. Each of these potential areas of cost containment provides income for specific groups, making change difficult. However, there is one area — administrative costs — about which there is broad agreement that it adds needlessly to the cost of health care, frustrates physicians and other clinicians, provides little benefit beyond employment, and clearly is one area in which the United States leads the world. These costs involve, but are not limited to, billing, excessive documentation, and the need to obtain prior approval for certain medications, radiological procedures, and specialty referrals. Although there is uncertainty about what percentage of the $3.5 trillion in annual health care spending is accounted for by administrative costs, if that amount is 10%, and could be reduced to 5%, an estimated $175 billion could be saved or redirected to provide care to patients and avoid rationing of some health care services. Reducing administrative costs should be the major focus of national efforts to reduce waste in health care and help control increases in health care spending.
For the United States to prosper in the 21st century, controlling health care costs is critical — indeed, it is the single most important challenge facing health care. Greater rationing of care is inevitable if health care costs continue to increase. Controlling health care costs is the only way to ensure appropriate investment in other areas, such as education, the environment, and infrastructure, and to provide a more equitable, just, and fair distribution of the remarkable health care advances that have been achieved with even more on the horizon. It has been said many times that in the richest country in the world, in which many of the greatest scientific and medical advances are developed, it is a blight on the US soul that each of its residents does not fully benefit from available health care.
By Don McCanne, M.D.
For those of you who skip the quoted text and go right to the comment (often a wise move as a time-saver), please pause here and read the last three paragraphs of Howard Bauchner’s editorial, and then return here.
How many times have you heard the opponents of single payer Medicare for All say that if we adopt such a system here then we’ll have rationing like the socialist health care systems of other nations? Yet the irony is that we already have a major problem with rationing, and it is perhaps the cruelest version of all since we ration by ability to pay in spite of spending far more on health care than any other nation.
So how did we end up with both high spending and rationing? Quite simply we have the most administratively complex health care financing system of all nations, which is very expensive to run, wasting funds that could be used on health care for those who are victims of rationing, not to mention that our financing system is profoundly inefficient. Remember that tens of millions of US residents remain uninsured, tens of millions more face excessive financial barriers to care due to excessive out-of-pocket spending, and personal bankruptcy due to medical debt has not declined with the implementation of the Affordable Care Act.
Bauchner has defined the problem: profound administrative excesses. We know the solution: administrative efficiency through a publicly-administered, equitably funded Single Payer Medicare for All program.
There has been a surge in support for a public option such as a Medicare buy-in, but that only adds one more player to our administratively complex, wasteful system. There is also support being expressed for our employer-sponsored plans and for other private approaches such as the Medicare Advantage plans, but these perpetuate our costly, dysfunctional, multi-payer approach to health care financing.
So what about rationing? With Single Payer Medicare for All we would essentially eliminate rationing by insurance design, rationing by restriction of benefits covered, rationing by prohibition of obtaining care outside of narrow provider lists, rationing by unaffordable out-of-pocket cost sharing, or rationing by administrative barriers such as prior authorization requirements. These forms of administered rationing are harmful and should be done away with. Inability to pay for care would no longer be a barrier since a Single Payer Medicare for All program finances care equitably such that it is affordable for everyone. Maldistribution of health care professionals and institutions would be corrected through central planning and equitable distribution of our health care resources. Although all nations, including ours, must deal with queues, other nations have shown that the delays can be minimized by improving distribution of health care resources and funds, and also by simply applying the science of queue management, though that requires that we select to run our government stewards who actually care.
Bauchner says, “it is a blight on the US soul that each of its residents does not fully benefit from available health care.” But we can fix this, and the sooner the better.
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