The Rationing of Health Care

I was reading "Confessions of a Health Care Rationer" by Dr. Eric Chevlen, and it occurred to me our entire health care debate is ignoring the inevitable question of health care rationing:

...I have always been opposed to healthcare rationing. But, then, I have always been opposed to aging, too. I have come to recognize the fundamental similarity between the two. They are simply unavoidable evils...The best we can do is to manage them with wisdom and compassion.

It’s a mistake to think of health care as a right. It is not a right; it is a good. Freedom of speech, by contrast, is a right, as is freedom of religious belief. They are privileges that inure to individuals as a consequence of the primordial right, free will. That is why we see them as inalienable. The exercise of these rights does not depend on any action of government, but rather on its inaction. Government may not legitimately interfere with their exercise, but nothing mandates that the government provide us with printing press or chapel.

Health care is different. It is more akin to the other goods which sustain life: food, clothing, and shelter. A well-ordered society exists to protect its members from the unlawful taking of life, and is structured to facilitate its members’ acquisition of these goods.

But health care differs from these other goods: First, health care is not absolutely essential for all people on a daily basis; second, there is an insufficient supply in this world to meet the demand of those who would have it. There is enough food in the world to feed everyone. Hunger and famine are the result of its inadequate distribution, not its absolute dearth. There are enough garments in the world to clothe everyone, and enough roofs to protect all from the rain. Health care, in contrast, is a far scarcer resource. Descartes once remarked that common sense is the most equitably distributed attribute in the world, because we never see anybody who feels he doesn’t have enough. Health care is not like common sense. We often see people who feel they don’t have enough, or at least can’t get enough at a price they’re willing or able to pay.

Until modern times, health care in the United States was distributed as most goods of life are distributed—according to personal wealth. The rich could afford it, and the poor couldn’t. Most economists would exclude this sort of market allocation as a form of rationing by definition. Nonetheless, market allocation is a form of distributing goods within a society, and when there are not enough of those goods to go around, the end-result in the short term is much the same.

Limiting health care’s availability by the criterion of personal wealth rightly offends our sense of the dignity of the individual. Are the lives of the poor not of the same intrinsic value of those of the wealthy? To be fair, it is rare in the United States that poverty alone prevents the uninsured poor from receiving lifesaving intervention in a healthcare crisis. A poor man having a heart attack is not turned away from the emergency room, nor is the poor woman in labor sent away to have her baby at home. (I am not arguing that such enormities never occur, but the fact that such occurrences remain scandalous and newsworthy is a testament to their rarity.) Yet it is equally undeniable that the poor get a lesser share of the preventive care that can maintain health or of the quotidian care for the less dramatic challenges to their health.

First, in answer to his question, "Are the lives of the poor not of the same intrinsic value of those of the wealthy?", my answer is no. Wealth is the mechanism our society uses to determine one's value. Wealth is acquired in accordance with perceived value: Those who offer the most productivity or useful ideas/items tend to have an easier time accumulating wealth than those with little or nothing to offer. We can sit here and point out how our society has some screwed up values when teachers make far less than NFL quarterbacks, but a teacher will only influence a few thousand lives during the course of his/her entire teaching career, whereas a good NFL quarterback may be watched by millions during just one day of his work. Like it or not, a good entertainer DOES have value; however, that is not the source of the problem: The economic reality is we have too many dollars chasing too little value, hence the ever increasing disparity between the wealthy and the poor. But thanks to the recent government bailouts, the politically-connected wealthy have managed to maintain this disparity, instead of facing the deflation which would have brought their wealth down to more reasonable levels. Look at it this way: With deflation, when you have little money like the poor do, the effect on you is actually positive (as prices drop), whereas the wealthy will take a huge hit under deflation as their investments sour and they make less than they did before (assuming their investments don't lose value completely).

Other than that one somewhat misguided assumption by Dr. Chevlen, his article is a must-read. Rationing is inevitable under any third party payer system, as we have seen under our current system as well as other countries where universal health care is present. As Dr. Chevlen goes on to explain:

Rationing must occur, but it need not be admitted. Denying the truth of rationing is more common in government-run health care schemes than private ones, because the government is reluctant to have the people know this ugly fact. Government-run programs, therefore, are more likely to disguise the rationing. This plausibly deniable form of limiting health care is called implicit healthcare rationing, and it assumes many forms. Rationing by termination occurs when patients are discharged from the hospital earlier than is medically optimal. Rationing by dilution occurs when second-best rather than first-best treatment is provided. Rationing by rejection or redirection involves healthcare providers turning away patients whose care will be inadequately reimbursed. This is commonly seen now in the Medicare and Medicaid programs, because those programs reimburse providers at a rate substantially lower than private insurance plans. Perhaps more common than those forms of rationing is rationing by delay, as exemplified by the outrageous amount of time patients in Canada must wait for hip replacement surgery or colonoscopy. The unifying theme in all these forms of implicit rationing is that, without admitting it, they force some patients to forego medical care that they want and are ostensibly entitled to receive.

Private insurance plans sometimes include an element of implicit rationing, but because they are, at heart, contractual agreements between the insurance company and the insured are more likely to ration health care explicitly. The many pages of the healthcare plan describe what is a covered service, which providers will be reimbursed for services, the duration of coverage, the dollar limit, and so on. The advantage of explicit over implicit rationing is obvious: It gives potential customers of the insurance plan information to use when deciding which insurance plan to buy, and gives them clear expectations of services to be delivered. Implicit rationing, by contrast, may have the sweetness of a promise, but is usually succeeded by the bitterness of a promise broken.

...Come, let us speak of unpleasant things. How is health care to be rationed? Who gets the short end of the stick?

While I consider that a classic line, I doubt we will ever have that discussion in any political arena.