THE "R" WORD -- RATIONING!

John Lantos, MD
June 19, 2009

Milton Friedman said, famously, that there is no such thing as a free lunch.

That’s true. The real question in health care rationing is related, but different. Who gets to eat and who pays the bill?

Health care financing in the United States is largely based upon a system by which everybody feels that they aren’t paying, even though our health care costs are far higher, per capita, than in any other country in the world. They are about 30% higher than in every other industrialized country.

We are all paying for a lunch that is not only not free but in fact is vastly overpriced. But because nobody brings us the check, it feels free.

Our health care is paid for by insurance that is either funded by taxes or taken out of our paycheck by our employers (and that is also funded by taxes – that is, by tax exemptions) or, if we don’t have money or health insurance, we get health care that is funded by either taxes, in public hospitals, or by cross-subsidization from overcharging people who do have insurance.

The whole system is so fiendishly complicated that we spend 20% of our health care dollars just paying administrators whose job is to try to get more of those collective dollars flowing into their organization and fewer flowing out.

Health economist Uwe Reinhardt long ago elaborated on Friedman’s culinary analogy, and described the political debates over health reform as really being about “Table Manners at the Health Care Feast.”

He suggested that, in all discussions of rationing, we should ask not what sorts of medical treatments will be allocated to which patients but, instead, what sorts lifestyles will be allocated to which health care providers. That is still a useful way to think about the debates about rationing.

If we cut the costs of our health care system, someone will get less of something than they do now. Who will it be, and how much of what will they get less of? As always, the goal of our convoluted political discourse is to make it as hard as possible to answer those questions.

Link: Health Care Rationing Rhetoric Overlooks Reality, New York Times, June 17