Appendix - Devising a methodology for open rationing

            A. Necessary policy changes

As we saw in Section 3, dysfunctional public policies have contributed greatly to the problems we are experiencing in our health care system, especially now that we are faced with the need to ration.  Those policies have maintained an almost complete dissociation between the consumption of health care services on one hand and the paying for those services on the other.  They have fostered the now-counterproductive American health care myth, encouraging a “no limits” attitude by both patients and doctors at a time when limits are more and more necessary.  Paradoxically, those same “no-limit” policies have contributed greatly to the ever-growing numbers of Americans with no health insurance at all, and who therefore face severe personal limits on what the health care system can offer.  Our policies have encouraged an expansive view of health care, bringing an ever-widening circle of life’s annoyances and disappointments under the purview of the health care system, along with all the expectations that such inclusion implies.  And, as we have seen, our policies have systematically eroded the doctor-patient relationship.

Establishing a basic structure for health care rationing will therefore require many explicit and difficult changes in our public policies.

What policy changes are necessary?

Clearly and publicly acknowledge the need to ration health care.  The necessity of publicly acknowledging health care rationing may seem obvious to some of us, but it will not be obvious to many policy makers.  Their natural tendency will be to continue to assert that rationing health care is entirely unnecessary; that all we need are some “changes” to our health care system.  This, of course, is what we are doing now.  It’s called covert rationing, and we have seen its fruits.

The public needs to understand that what we are really talking about here is deciding how and from whom to withhold beneficial medical services.  Acknowledging this painful fact clearly and publicly is a necessary first step.  Without this acknowledgement, we cannot even begin to make the kinds of radical changes in our thinking and in our actions that are necessary in devising a fair and equitable way to ration health care. 

Fortunately, Americans are not as delicate as some public officials and health care economists seem to think.  We’ve risen to meet serious challenges throughout our history, and we’ll do it again.  After hearing the truth, once we get through an initial period of anger and denial, we can begin to find ways to deal fairly with the real limitation we face, to stabilize our health care system, to optimize our public health, and to re-commit ourselves to our bedrock belief in the worth of the individual.

Acknowledge that health care is not an independent societal need.  The American health care myth treats health care as if it is completely independent of all other societal concerns, that has (or at least, ought to have) unlimited scope and unlimited resources.  We must make it our policy to acknowledge that, on the contrary, health care is merely one part of our social structure, and not an entity unto itself.  We must, in other words, formally abandon the American health care myth.  Only in this way will we find the impetus we need for two prerequisites to a fair system of rationing: a) to define clearly the purpose (and therefore the limitations) of “health care;” and b) to prioritize the needs of the health care system in relation to all the other services our society must provide for its citizens.  These two prerequisites constitute the first two principles for rationing discussed in Chapter 9.

Make a non-negotiable commitment to universal health care coverage.  A formal commitment to include every American in the new health care system ought to be the first step in actually designing a system for open rationing.  One way or another, every American today is paying for health care, whether they have access to it or not.  We pay insurance premiums, we are subject to Medicare payroll deductions, we pay other taxes and fees, and we sacrifice services and benefits that would otherwise be forthcoming if our tax structure were not so committed to supporting a runaway health care system.  Thus, every American has a legitimate claim to be included in a universal health care system.

Perhaps from a more practical viewpoint, universal coverage also will be the primary rallying point for encouraging citizens to buy into a new health care system.  The realization that no one will be excluded from the benefits of this system, nor excluded from its inherent risks, will create a sense of investment.  Every citizen will be vitally interested in creating a system that is as fair as it can be – and the resultant sense of community, that “we’re all in it together,” will be extremely important (as we will see) in devising a means of prioritizing health care services.

Establish governmental fiscal policies that create powerful incentives for efficiency, fairness, and as much “voluntary rationing” as possible.  It is unlikely that a rationing system completely imposed by the government (or any third party) will ever be acceptable to Americans.  As much as possible, the government’s aim should be to create fiscal and tax policies that encourage behaviors that will minimize the amount of imposed rationing that is necessary. 

Governmental policies are needed to create a program of MSAs for each individual, in order to render as many rationing decisions as possible voluntary instead of imposed.

Further, governmental policies ought to encourage the participation of the insurance industry in the new health care system.  Not only will inclusion of the powerful insurance industry bring pricing competition into the picture, but also it will help enlist the support of that industry (and of certain key politicians) for the needed changes in health care.

Under the basic structure for rationing we have proposed, private insurance companies would be invited to offer Tier 2 Universal Basic Health Plans.  These Tier 2 plans will have to include a specific, prescribed book of benefits, in order to assure that all Americans had the same basic coverage. (How these prescribed benefits will be determined is taken up in Section B of this Appendix).  Any company offering Tier 2 policies, however, will also be invited to offer the additional, optional insurance plans included under Tier 3.  Companies could become as creative as they wanted in devising these optional plans.

John Goodman and Merrill Matthews of the National Center for Policy Analysis have recently proposed a complete set of policies designed to align governmental incentives and tax programs to optimize efficiency within the health care system. (Goodman J and Matthews M. Reforming the U.S. Health Care System. National Center for Policy Analysis, Policy Backgrounder 149.  April, 1999.)Their proposals are quite comprehensive, and taken together constitute nearly a complete reform of the American health care system.  Such proposals deserve careful consideration, as they would go a long way toward reducing wasted expenditures and minimizing the amount of rationing that will have to be imposed by third parties.

Clearly articulate the ethical standards under which rationing decisions will be made.  In Chapter 9 we surveyed the possible ethical standards under which we can develop a system of open health care rationing.  Whether we finally adopt a standard similar to the Fair Chance, Equal Opportunity set out in that chapter, or some other set of precepts, it is vital that we decide explicitly what our ethical standards will be.  A formal public debate on ethical standards, and a formal decision on them, will be mandatory.

Only clearly stated ethical standards can provide an adequate justification for the rationing decisions we make.  Without explicit standards, rationing decisions will be considered by many to be arbitrary – and with good reason.  But it is important to realize that our choice of ethical standards goes far beyond merely being philosophically useful.  In Section C of this Appendix we will see how, as we make the cost-effectiveness calculations that establish which health care services will be covered and which will not, our ethical standards actually determine how we do the math.

Re-sanctify the doctor-patient relationship.  A major theme of this book has been the vital importance of the doctor-patient relationship.  Under any system of rationing, patients have a particularly acute need for an advocate, a trained professional who is primarily concerned with their rights and well-being.  Open rationing merely makes the competing needs of society more evident; it does not eliminate those competing interests.

The covert rationing we have done so far has significantly harmed the doctor-patient relationship.  A generation of physicians has been trained under the notion that their obligation to society supercedes their obligation to individual patients.  We should not assume that adopting an open rationing system will automatically repair the damage. 

 We need to publicly and explicitly re-sanctify the doctor-patient relationship, to make it clear  public policy that the primary role of physicians is to ensure the well-being of their individual patients.  Our system of open rationing will set out the rules and regulations aimed at protecting the interests of society.  Like attorneys protecting their clients, our physicians should be obligated to concern themselves with protecting their patients – working (again like lawyers) within the constraints of the rules society has set out.

Beyond the basic structure of rationing

Once we decide upon a basic structure for open rationing, and once we establish the changes in public policy necessary to make that structure possible, we can begin to systematically construct our rationing system.  In doing so, the most difficult problem will be establishing a mechanism for deciding which health care services will be covered under the Universal Basic Health Plan (Tier 2), and which will not be covered.  How we might do this is the subject of the final two sections of this Appendix.

Next: Appendix B - Prioritizing health services

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