Calling Rationing what it Is

John Lantos, MD
John B. Francis Chair in Bioethics
December 5, 2008

One of the best articles ever written on health policy and rationing is by Princeton health economist Uwe Reinhardt. His 1981 paper, “Table manners at the health-care feast: 'regulation' vs. 'market',” suggests that we will never understand health policy until we call things by their proper names.

Reinhardt proposes that, instead of speaking about “national health care expenditures,” we should instead discuss, “national health care incomes.” “Increased efficiency” becomes “reduced employment.” “Cost containment” becomes “income containment.”

By this tongue-half-in-cheek shift in terms, Reinhardt highlights the ways in which the health care industry is different from other industries.

In the rest of the economic world, growth is good. Companies try to maximize revenue (that is, maximize expenditures on their product) in order to maximize income. Only in health care is growth seen as bad, and that is only because all industrialized countries view health care as a special sort of good, one to which we all have some entitlement.

This leads to the two central questions of health policy everywhere: 1) how equal the entitlement will be? And, 2) to what, exactly, are we entitled?

Equality can be limited on the basis of age, disability, prognosis, gender, location (i.e. rural vs. urban or suburban) or ability to pay. Scope of coverage can be limited by an almost infinite array of considerations. The most common, and most ethically defensible, is cost-effectiveness.

Rationing treatments based on cost-effectiveness can either be done systematically, as they do in England, or on an ad hoc basis, as we do here. Peter Ubel described – and defended - the American approach in his 1995 paper in the Annals of Internal Medicine called, “The unbearable rightness of bedside rationing: physician duties in a climate of cost-containment.”

Most bioethicists reject Ubel’s approach and argue for something like the British approach, with its admirable honesty, transparency, and accountability. The United States health system has resisted such approaches, however, and never heeded Reinhardt’s call for better “table manners.”

Instead, everyone grabs whatever he or she can get. Perhaps with the strains on our economic system and the reformist mood in Washington, the stars are aligned to allow a new approach. If so, Britain’s National Institute for Health and Clinical Excellence (NICE) might show us the way.

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Links:

British Balance Gain Against the Cost of the Latest Drugs, New York Times
December 2

Physicians' Role in Cost Containment, Virtual Mentor, American Medical Association, November 2003.