The Ethics of Rationing Healthcare

Lorell LaBoube

Milton Friedman once said, there is no such thing as a free lunch. Does that apply to health care? And does that mean the R word, rationing, will be a factor in health care reform? Hi, welcome to the Bioethics Channel, a production of the Center for Practical Bioethics. For more information about the Center and its programs, go to practicalbioethics.org. That's practicalbioethics.org. Dr. John Lantos joins us. He holds the John B. Francis Chair in Bioethics, and he served on President Clinton's Task Force on National Healthcare Reform in the 1990s. Dr. Lantos, the R-word, rationing, has entered the debate over healthcare reform. You've stated before that we already ration healthcare. Could you explain that, please?

Dr. John Lantos

Well, of course we ration healthcare. Healthcare is very expensive. Healthcare needs are infinite. and we can't afford everything that we would possibly want. So we don't get everything we would possibly want. That's rationing. The question isn't, do we ration? It's, what do we ration? How do we ration? For whom do we ration? And who gets to make the decisions? Most people would say, if a new treatment comes along that could extend your life by a week and cost $10 million, we couldn't provide that for everyone in America. at least not that, and food, clothing, and shelter as well. So those are the kinds of decisions that are inevitably a part of any health care system.

Lorell LaBoube

Now, you stated in a recent blog at the Center that the real question in health care rationing is who gets to eat and who pays the bill.

Dr. John Lantos

I was quoting a famous article written by health economist Uwe Reinhart, who teaches at Princeton, called Table Manners at the Health Care Feast. He pointed out that our health care system has always been more expensive than any other industrialized country, and much of that money goes to providing higher salaries for health care workers rather than for anything that improves health outcomes. Any measurable health outcome in the U.S. is the same or worse than in most European countries. Australia, and New Zealand. So whatever we're spending, we don't seem to be getting any more bang for our buck. What we do clearly get is richer doctors, richer hospital administrators, richer insurance companies. And so part of what rationing would achieve, I think, is rationing salaries rather than rationing health care.

Lorell LaBoube

Is a true understanding of rationing inhibited by the fact that we're somewhat, at least, shielded from the true cost of health care.

Dr. John Lantos

Oh, yeah. Our entire system is designed to make it impossible to figure out who's paying what for whom. That doesn't mean that we are shielded in the sense that we're not paying. Nobody else is paying for our health care. We are paying for our health care. We just do it through mechanisms that are not straightforward or not able to be disentangled, that is. payroll taxes, insurance premiums, income taxes, all sorts of other mechanisms to provide dollars to pay for health care without anybody feeling that they themselves are getting the bill.

Lorell LaBoube

Well, for a lot of people, a doctor visit may be a prepay of $20. That's what health care costs.

Dr. John Lantos

That is the immediate out-of-pocket cost, of course, although if the doctor is getting $200, somebody's paying the other $180. That somebody is you. You're just paying it in a way that's not straightforward.

Lorell LaBoube

It seems that in order for health care reform to be successful, we must cut costs. That's what everybody's talking about in Washington, D.C., and elsewhere. But it seems like in order to cut costs, we must ration care. Is that a fair assessment?

Dr. John Lantos

Yes and no. You could imagine the following scenario.

Dr. John Lantos

Imagine that the government decided that the way we were going to reorganize the health care system was to immediately slash all prices by 10%. Hospitals would still provide the same services. Doctors would still see as many patients. They'd just earn 10% less money. We wouldn't limit anything that's currently available. It would just be cheaper.

Lorell LaBoube

Now, wouldn't doctors argue that slashing what they get by 10%, their reimbursement by 10%, then has an effect of having them cut staff? Maybe they're not able to have the type of practice that they feel like is required to best meet the needs of their patients that come to them. What about that argument?

Dr. John Lantos

Imagine a company that has 10 employees and their revenues go down by 10%. And imagine that all the employees make the same amount of money. There'd be two ways to meet payroll with 10% less revenue. Fire one employee, which would be rationing jobs, or cut everybody's salary by 10%. Everybody would still be working. The company would be just as productive, but their payroll costs would be lower. You can imagine doing that for health care. And in fact, that would get us closer to the way every other country provides health care. Most health care bills are 30% less than in our country, and people aren't getting less health care. They're just paying less for it.

Lorell LaBoube

A recent article in the New York Times was entitled, Health Care Rationing Rhetoric Overlooks Reality. I'd like to share with you a few highlights of that and ask for your reaction. The author said, the choices in between rationing, and not rationing. It's between rationing well and rationing badly.

Dr. John Lantos

Well, as I said at the beginning, we ration. Every health care system rations. So it's not a question of whether we will or won't. It's how. So I assume that's what the author was talking about, whether we can make decisions to provide the most effective treatments, the most cost-effective treatments, and to provide them for the most people That way we'd get more value for our health care dollar while still limiting access to certain treatments or to certain incomes for certain people.

Lorell LaBoube

Quoting here again, one proposal for health care reform would call on the federal government to do more research on which treatments actually worked. Armed with better information, Medicare could pay more for effective treatments and no longer pay quite so much for health care that does not make people healthier.

Dr. John Lantos

What a scary thing to only pay for treatments that work. It sounds socialist to me.

Lorell LaBoube

Okay, come on now. Sarcasm, I guess, can work on this. But go ahead. Explain some more, please.

Dr. John Lantos

Imagine the alternative. Medicare would not evaluate treatments to see whether they would work, but would simply pay for any treatment, whether it's been studied or not, for any person, whether it does them harm or good. It's absurd. So all the rhetoric about cost-effectiveness analysis or comparative effectiveness analysis or only paying for treatments that work being a dangerous thing is ludicrous and absurd. Of course we only want to pay for treatments that work. The question is whether the studies themselves are done well, which gets back to the question of whether rationing will be done well.

Lorell LaBoube

The idea of research – and I've talked to you about this – outside of this podcast. The idea that research into treatment of what treatments actually work sounds good, but I'm reminded of my days with the Medical Society here in Kansas City, Missouri, when a doctor told me, you know, Laurel, it's possible to practice good medicine and still have a bad result. And the context of that was the idea of a one-size-fits-all cookbook of medicine. that made him cringe and, frankly, makes me cringe a little bit. Is that a factor in this? Is that a risk?

Dr. John Lantos

That is the nature of medical science. Every time we do a randomized controlled trial, the gold standard for scientific knowledge in medicine, we are coming up with a cookbook of one-size-fits-all medicine. We take 1,000 people. We flip a coin to decide who gets treatment A or treatment B. If 51% of the people in one group do better and 49% in the other group do better, then from now on everybody gets the treatment that worked for 51% of people. That's medical science. Is it cookbook? Yes. Is that a bad thing? No. What's the alternative? Your friendly doctor working for the medical society makes it up. himself for every patient that he sees in every clinical encounter. If you would feel better getting that kind of health care, you are not a wise health care consumer.

Lorell LaBoube

Take that, says Dr. Lantos. A lot of this discussion has taken place in the venue of politics within that arena. Is that a very helpful place for this kind of discussion to take place?

Dr. John Lantos

Obviously, a philosopher king making the decisions would be a much better way to do it, somebody who was all-wise, all-knowing, and all-powerful, who could make the decisions about what should or should not be provided, immunized from any political pressure, organized lobbying, or self-interest. I don't see that on the political horizon in the United States, so democratic processes are the least worst alternative. for doing this. The mystery, I think, is why such processes have worked more poorly in this country than in most other industrialized democracies. At least

Lorell LaBoube

when it comes to health care.

Dr. John Lantos

Which, as I say, have managed to cover all their citizens for two-thirds of the cost and with better outcomes. The United States has been trying to achieve comprehensive health care reform Since Teddy Roosevelt's time, he was the first to propose a universal health care coverage system about 100 years ago. And we've been chipping away at it in ways that reflect political alliances, deeply held cultural values, and market forces. I think that's the way it's going to continue to be with all its frightening inefficiencies.

Lorell LaBoube

So, Dr. Lantos. How should we examine the arguments, the rhetoric around the debate on rationing to reach our own, dare I say it, rational decisions on what to support?

Dr. John Lantos

Careful scrutiny of the packages that are coming out of Congress. Comparative effectiveness in a different sense than it's usually used, that is, comparing what we get in this country with what other countries provide. And an understanding that nobody else is paying for what we get, even though figuring out each person's individual contribution to the health care system is unbelievably difficult, if not impossible. But we're all paying for it. We all have an interest in limiting the cost that we pay, and that will inevitably require some limitations on what individuals can get for their health care.

Lorell LaBoube

Dr. John Lantos holds the John B. Francis Chair in Bioethics at the Center for Practical Bioethics, and he served on President Clinton's Task Force on National Health Care Reform. You've been listening to the Bioethics Channel, a production of the Center for Practical Bioethics. For more information, visit the Center's website at practicalbioethics.org. That's practicalbioethics.org. I'm your host, Laurel LeBun. Thanks for listening to the Bioethics Channel.