a proposed scheme for open rationing

A system of open health care rationing based on these six principles might take one of several forms. This figure shows one possible rationing scheme that takes into account all of the features we have discussed so far. A brief outline of this scheme, for illustrative purposes, will suffice for now. A more detailed treatment of such a plan, and how it might be developed without provoking street riots, will be presented in the Appendix.

The hallmark of this illustrative rationing system is that it is tiered, and the tiers are established according to cost-effectiveness scores of the medical services provided. Every individual will be covered for health care services lying within the first two tiers of this system; coverage within the third tier is optional.

Under such a plan, Tier 1 therapy is provided through a Medical Savings Account (MSA), which will be established for every individual. The first several thousand dollars of a person’s yearly health care expenses ($3000 in this example) will be paid for from her MSA. If a person spends less than $3000 on her health care in a given year, the money remaining in the MSA will accumulate, and the amount remaining at age 65 will be treated as an Individual Retirement Account (IRA).

Once an individual’s health care expenses during a given year exceed Tier 1, the Universal Basic Health Plan kicks in to provide coverage of expenses within the Tier 2. The Universal Basic Health Plan will cover every health care service that has a sufficiently favorable cost-effectiveness score. (In the example shown, all health care services will be ranked according to the gain in Quality Adjusted Life Years [QALY] they provide. Tier 2 will provide all services that cost less than $50,000 per QALY. QALYs and how they can be measured are discussed in detail in the Appendix.)

Finally, individuals may choose to buy optional, additional health insurance that would cover health care services in Tier 3. Such optional insurance would be privately administered and competitively priced, based on the QALY scores that are covered under the policy. Thus, as shown in the figure, Optional Health Insurance Plan A would cover health care services costing up to $70,000/ QALY; whereas Optional Health Insurance Plan B would take the coverage up to $90,000/ QALY. The premiums for these optional health insurance plans would include an “affluence surcharge,” which could be used to help fund (or to expand) the Universal Basic Health Plan for the less wealthy.

Such a scheme would a) provide universal coverage, b) include both private and public sectors in its administration, c) minimize the cost of insurance premiums, d) give individuals control over as much of the rationing as possible, and e) minimize externally applied rationing.

Deciding on the basic principles for a scheme of open health care rationing is the most important, and possibly the most difficult, step. Without explicitly considering each of the six principles discussed in this chapter, any attempt at developing an open rationing plan would dissolve almost immediately into chaos. On the other hand, armed with these principles – fully considered and widely agreed upon – an equitable and civil system for openly rationing health care becomes eminently possible. In the Appendix, I consider in more detail just how these principles might be used to forge a workable methodology for open rationing,

For now, however, we have a more important question to address. Namely, even if you and I (and perhaps a few others) are now willing to explore the notion of openly rationing health care, just how are we to engage the rest of our society – the huge majority still paralyzed by the American health care myth – in such a discussion? This is perhaps the most intractable issue of all, and it is the one we will take up now.

Next: What we can do now

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