There is a general consensus that the United States provides some of the best, if not the best, health care in the world. The advances in medicine and technology are breathtaking. But, while these advances continue to help improve the health, well-being, and quality of life for many, the financial implications of continued advances are significant and may not be sustainable.
If individuals paid directly for the care they receive, many Americans would not have access to much of the available treatments and almost certainly no access to high-end therapies. While eliminating or reducing financial barriers to care/treatment, insurance obscures the true cost of health care and creates an expectation and sense of entitlement among those fortunate enough to have coverage.
Many Americans are likely to have a negative visceral reaction to the term “rationing.” But while it may not be explicitly labeled as such, it is in fact used today. For example, insurance companies make decisions everyday to cover one procedure, but not another. States which grapple with insufficient Medicaid dollars decide which services are covered and which are not. Individuals seeking non-covered elective procedures, or procedures for which they incur a coinsurance or copayments, make personal judgments about what they can and cannot afford.
As health care costs climb and as new threats challenge limited resources, additional rationing efforts, explicitly based on costs rather than medical necessity, may be needed. Rationing may also be necessary in the event of supply shortages, irrespective of cost. For example, if this country is faced with an avian flu pandemic, rationing flu vaccine may occur. Ethicists Ezekiel Emanuel and Alan Wertheimer suggest that following health care workers, individuals ages 13 to 40 – the young with more of their life to live – should have priority.1 This argument is at odds with official U.S. policy, which, after health care workers, gives priority to high risk individuals, pregnant women, and key government leaders.2 In addition, cultural differences could affect how individual physicians and patients would choose to ration supplies and services.
In 1984, Henry Aaron and colleagues published The Painful Prescription: Rationing Hospital Care, a study comparing standards of care in the United States and Great Britain. At that time, rationing was not a concept that Americans could fathom. Twenty years later, the concept is becoming more central to policy discussions in this country. With funding from the Robert Wood Johnson Foundation’s Changes in Health Care Financing and Organization initiative, Aaron has updated his work in a new book, Can We Say No? The Challenge of Rationing Health Care,3 and produced two policy briefs, one on the underlying meaning behind rationing4 and the other on the treatment of coronary disease.5 Aaron points out that the British ration by legislating how much the health care system can spend. The United States, by contrast, has yet to create successful mechanisms to adequately control health care spending. He cautions that we face two choices in this country: “pay the enormous bill for all beneficial medical care whatever the cost” or “ration.”6 Aaron outlines some general approaches to rationing: develop public policies to limit demand for care; curb the advance of medical technology; or limit care that is worth less than it costs to people who are well insured. He notes that the steps necessary to ration care may be more objectionable than simply continuing to pay for it.7
While one can presume that unfettered access to unlimited health care results in a healthier population, there is evidence to suggest otherwise. A study assessing the relative health status of individuals in Great Britain and the United States analyzed residents ages 55 to 64 using comparable measures of health, income, and education. The researchers found that based on self-reported and biological data, residents in the United States are much less healthy than their English counterparts.8 A study comparing individuals in Canada and the United States found relatively similar health status, but significant income-related disparities in access. The poorest Americans were more likely to be in fair or poor health than those similarly situated in Canada.9
The challenge that may face Americans, Aaron notes, is how best to ration “rationally.”10 With the diffusion of consumer-based health care, Americans may voluntarily limit their own spending, circumventing the need to seriously consider widespread rationing. In a country where “freedom of choice” is a guiding principle, the alternative is not appealing. Determining the “how” of rationing would not be easy. Perhaps the United States would follow New Zealand’s lead and use clinical guidelines to ration health care services.11 Perhaps the United States would look to its neighbor Canada or to Great Britain for lessons on rationing.
Related HCFO funded Research:
Title: The Painful Prescription: Revisited
Institution: The Brookings Institution
Time: May, 2004 – December, 2005
Principal Investigator: Henry J. Aaron, Ph.D.
Can health care spending be controlled without significant rationing? This is a question that will be central to the U.S. health care policy debates in the years ahead. The researchers updated their RWJF-funded research of 20 years ago from which they published “The Painful Prescription: Rationing Hospital Care.” This seminal work compared health care in the United States and Great Britain and examined the potential for rationing in this country. The researchers: (1) added a new section to their book on out-patient prescription drugs; and (2) updated data on most of the technologies examined in the original book. The HCFO-funded portion of this project included the analysis behind and production of two policy briefs, one on the underlying meaning behind rationing and the other on the treatment of coronary disease. The remainder of the project, for which the researchers have other funding, resulted in a journal article and a book-length manuscript published in January 2005. The researchers sought to clarify the nature of the painful prescription - - that “external constraint” known as rationing that will force patients to forego care when providing all beneficial medical care to everyone is more than the U.S. can afford.
For more information on this grant, see http://www.hcfo.net/grantees/grant.asp?GrantNo=50863
Title: Impact of Medicare
Institution: University of Minnesota
Time: November, 2003 - October, 2005
Principal Investigator: Susan Bartlett Foote, J.D.
How do Medicare coverage policies, under national coverage determinations (NCDs) and local medical review policies (LMRPs), affect claims, access and cost? The researchers will examine eight procedures that fall into three policy categories: new technology, extension of existing technology, and utilization management. The study includes an examination of changes in the use of the eight procedures over the period 1999-2001 to answer the following research questions: 1) Do LMPRs or NCDs affect local practice patterns in Medicare? 2) Are there different effects for distinct categories of policies? 3) If an NCD applies to all providers and beneficiaries, can we expect consistency in utilization patterns in Medicare following the implementation of a national policy? 4) If LMRPs are consistent across local contracts, should we see consistency in utilization post-policy implementation? 5) To the extent that LMRPs applicable to the same procedures vary from region to region, should we expect to see variations in practice that reflect these policy differences? and 6) If variations in utilization persist in light of similar policies, how can those variations in practice patterns be explained? The objective of this study is to provide insights to policy makers on the effectiveness of coverage policies, the appropriate balance between national and local decisions, and implications for efforts to enact contractor reform.
For more information on this grant, see http://www.hcfo.net/grantees/grant.asp?GrantNo=49692
Title: Evaluation of Medicare's Local Medical Review Policies for New Medical Technologies
Institution: University of Minnesota
Time: May, 2001 - December, 2003
Principal Investigator: Susan Bartlett Foote, J.D.
How does variation in coverage decisions affect access to new technologies and equity for beneficiaries in the Medicare program? Are Medicare’s Local Medical Review Policies (LMRPs) in need of reform? LMRPs are one of two ways that HCFA evaluates new technologies and procedures in order to make coverage determinations. According to the researchers, a small number of technologies are reviewed through HCFA’s national process, where decisions are made uniformly across the country. However, the majority of such coverage decisions are made by local carriers and intermediaries under contract to HCFA, with the LMRPs binding only in the local jurisdiction. The researchers evaluated variations in LMRPs by analyzing: 1) the players - who participates in and influence decisions; 2) the process - how decision-making procedures differ; 3) the evidence - how evidence of value is solicited and measured; and 4) the outcomes - measuring and mapping timing and content patterns. The objective of the study was to provide policymakers considering the virtues of a more uniform national coverage policy, relative to a more flexible local policy, with better information about the extent of LMRP variation, the sources of variation, and the implications for flexible decision making, beneficiary access, and Medicare equity.
For more information on this grant, see http://www.hcfo.net/grantees/grant.asp?GrantNo=42086
Title: Cost Effectiveness, Quality and the Future of Medical Technology Assessment
Institution: Harvard School of Public Health
Time: July, 2002 - June, 2004
Principal Investigator: Peter J. Neumann, Sc.D.
How does Medicare assess and make coverage decisions for new medical technologies? First, the researchers will conduct an in-depth descriptive and multivariate explanatory analysis of 100 CMS coverage decisions over the past 12 years. They then will compare Medicare's processes and decisions with those of other health technology assessment (HTA) organizations. Specifically, the researchers will examine 6 key questions: 1) What technologies has Medicare formally assessed in the past decade? 2) What are the key determinants of Medicare coverage decisions? 3) Have coverage decisions been consistent with evidence of societal cost-effectiveness? 4) Have the same technologies been assessed by other HTA organizations? 5) What "best practices" for technology assessment surface from an investigation of key technology assessment organizations in the U.S. and abroad? and, 6) What role can cost-effectiveness play in future assessments in the U.S. (given data limitations, multiple societal objectives, and likely political opposition)? The objective of the study is to inform decision makers about HTA processes and to reveal "best practices" about technology assessment as they consider whether to cover new medical technologies.
For more information on this grant, see http://www.hcfo.net/grantees/grant.asp?GrantNo=46071
Title: Understanding Medical Necessity Decision Making
Institution: Stanford University
Time: June, 2000 - October, 2001
Principal Investigator: Linda Bergthold, Ph.D.
How do policies regulating medical necessity decision-making influence national health plans? Researchers from Stanford University attempted to answer the following questions: 1) Who are the medical necessity decision makers? 2) How are the terms defined and what information do decision makers use in making their decisions, including what type of evidence and cost effectiveness information is considered? 3) What procedures do health plans use to communicate with physicians and patients throughout the decision making process and to track and use coverage decisions for quality improvement? 4) How can variation in terminology and application of guidelines be reduced? 5) What is the role of accreditation, regulation, legislation, and organizational policies and procedures in promoting clearer definitions and more consistent decision making? and 6) How do the answers to the first five questions vary by the size of the health plan, its tax status, degree of management of care, or geographic region? The objective of this project was to test the findings of a similar project recently completed in California and provide a better understanding of medical necessity decision-making to state and national policymakers.
For more information on this grant, see http://www.hcfo.net/grantees/grant.asp?GrantNo=39396
1 Emanuel, E. and A. Wertheimer, “Public Health: Who Should Get Influenza Vaccine When Not All Can?” Science, May 12, 2006: Vol. 312. no. 5775, pp. 854 – 855.
2 http://www.hon.ch/News/HSN/532663.html
3 Can We Say No? The Challenge of Rationing Health Care, Brookings Institution Press, 2005. http://www.brookings.edu/press/books/sayingno.htm
4 Aaron, H.J., “Health Care Rationing: What it Means,” Policy Brief #147, December 2005. http://www.brook.edu/comm/policybriefs/pb147.htm
5 Aaron, H.J., “Treatment of Coronary Artery Disease: What Does Rationing Do?; Policy Brief #148, December 2005. http://www.brook.edu/comm/policybriefs/pb148.htm
6 Can We Say No? p. 148.
7 Can We Say No? pp. 3-4.
8 Banks J, et al., “Disease and Disadvantage in the United Stated and in England,” JAMA, May 3, 2006, Vol. 295, No. 17, pp. 2037-45.
9 Sanmartin C, et al., “Comparing Health and Health Care Use in Canada and the United States,” Health Affairs, July/Aug 2006, Vol. 25, No. 4, pp.1133-42. But see, “Poor U.S. Scores in Health Care Don’t Measure Nobels and Innovation,” New York Times, October 5, 2006 (noting that medical innovation in the U.S. improves health and life expectancy in all developed countries). http://www.nytimes.com/2006/10/05/business/05scene.html?_r=2&oref=slogin&oref=slogin
10 Policy Brief #147 p. 2.
11 Feek CM, “Experience with Rationing Health Care in New Zealand,” BMJ, 15 May 1999, Vol. 318, pp.1346-48. See also, Neumann PJ, “Emerging Lessons from the Drug Effectiveness Review Project,” Health Affairs Web Exclusive (describing an initiative using evidence-based reviews to inform drug formulary decisions).
