The Need for Healthcare Rationing

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Describe the current healthcare cost milieu and evaluate the need to ration the available healthcare services

Introduction

5.2%...this was the percentage of the Gross Domestic Product (GDP) attributed to health care spending in the United States in 1960. 2004 statistics showed that number to have more than tripled to an astounding 16% which represents the shocking truth that America now spends more on its health care services and technology than it does on food. With this spending trend in mind, one needs to ask the questions, "What is driving this spending growth, what are the benefits being realized by the growth and what can be done to control and contain this "out-of-control and uncontained" spending?"

Typically, when spending patterns such as this are occurring it is reasonable to accept them as signs or symptoms of progress within that sector. Within the health care sector, new medical technology is a major factor in the rising spending. More is being spent on medicine now because medicine can do more than before. "Medical technological advances have generally raised costs rather than lowered them (Krugman & Wells, 2006)" and as in other economic sectors, the new technology does produce some cost savings but the spending associated far outweighs the savings.

On the surface, the increased spending as a result of advanced technology and increased ability to provide life saving measures not previously available sounds like a perfectly acceptable condition in the macro-economic view of the health care industry. However, there's much more to the story just beneath the surface. By simply peeling away the initial layer of the "provision of care" we are exposed to the overwhelming inefficiencies of this industry, and these inefficiencies and associated spending become much more concerning as the health care sector grows and occupies a larger portion of the economic pie.

Almost everyone agrees that the United States health care system is inefficient and in need of some type of reform but the debate begins when the options are brought to the table. There are several possible approaches to healthcare reform but the answer to what "real" health care reform looks like is yet to be defined. That being said, there is one dirty little term that is consistent in most approaches (even when it is cleverly called something else to cloak its true meaning)...rationing.

This paper will explore the existence of and need for the rationing of services within the health care industry. In addition, it will discuss the possible solutions to the ever increasing costs of providing health care to the American public, all of which include some form of resource rationing.

Literature Review

In his article for the New York Time in July of 2009, Peter Singer states that "the debate over health care reform in the United States should start from the premise that some form of health care rationing is both inescapable and desirable". He goes on to surmise that any use of public funds for the purpose of subsidizing or directly funding health care must undergo the scrutiny of trying to attain the maximum value for the money. Since rationing health care means getting expected value for the billions of dollars being spent by establishing, and enforcing, limits on the types of procedures and treatments that get paid for out of the public treasure chest. To skip or avoid this measure could only be described as negligent. Singer proposes a system that focuses on spending less on expensive treatments for those patients that have relatively little time to live either with or without drugs or treatment and diverting the funds toward the treatments that provide a larger number of people extended years, even decades, if treatment is received.

This platform is parallel to the foundation of the Oregon Health Plan outlined in a Journal of Healthcare Managements article in Jul/Aug 2003 by Elizabeth Floyd. The Oregon Health Plan identifies the primary drivers of the escalating costs of health care as technology, the aging population the concept that health care is ...