Rationing of Health Care: Private Gain vs. The Common Good

One dollar bills rolled inside a pill bottle with pills.
One dollar bills rolled inside a pill bottle with pills.

Rationing, the hated R-word, evokes widespread resentment and debate whenever mentioned in connection with health care in the U. S. There are many who hold that we don't ration care now, never want to, and that the free market will work its magic and be fair to all without rationing if we just keep the government out of health care. This large group sees the government as the boogey man. Many others see that private markets already ration care based on ability to pay, and support the role of government providing for the common good, in this case by assuring access to care based on medical need.

Important as this controversy is, it has still not been resolved, leaving the very word "rationing" as a lightning rod issue that tends to prevent rational discourse. This is especially true on the right, as illustrated by former vice president candidate Sarah Palin's warning during the 2009 debate that the ACA that would bring on rationing and "empower unelected bureaucrats to make decisions affecting life or death health care matters," referring to Medicare's funding of end-of-life counseling sessions as "death panels." (1)

Following up on my last two blog posts, dealing with the greed of the pharmaceutical industry (2) and the soaring costs and prices of health care despite all efforts toward cost containment (3), we now need to consider where we stand on rationing itself. In her excellent 2012 book Health Care for Some: Rights and Rationing in the United States since 1930, Beatrix Hoffman shows us how we have long rationed health care, not in a top-down way but "by price, insurance coverage and other methods involving both the private and public sectors in ways both official and unofficial, intended and unintended, visible and invisible." (4)

So here is a short list of just some of the ways that we ration care, both in the private and public sectors, although most still don't acknowledge that this is rationing:

Private sector:
  • By insurers: by premiums, deductibles, other cost-sharing, coverage restrictions, narrow networks, avoiding sicker patients, and other ways.
  • By drug companies and medical device manufacturers: by pricing policies.
  • By hospital systems and other facilities, especially for-profit: up-coding of costs, high prices, and unintelligible billing practices.
Public sector:
  • Privatization of Medicare and Medicaid programs, with higher costs of administration and profiteering, especially in managed care organizations
  • Medicare's alternate payment strategies that incent hospitals and providers to provide less care, such as in bundling and accountable care organizations

Restricted eligibility and coverage policies for Medicaid that vary widely by state
Under the ACA, we still have almost 30 million Americans without health insurance, with tens of millions more underinsured.

How does the unresolved issue of rationing impact concrete health care issues today? Taking the case of hepatitis C as an example, we see that we are totally unprepared to resolve it in the public interest. There are about 3.2 million Americans with chronic hepatitis C, a life-threatening disease for individuals and a serious public health problem that can be cured by new drugs at a cost approaching $90,000 per patient. It is spread by blood, becomes chronic for most patients, and is the leading cause of liver cancer and liver transplants. Many patients are on Medicaid, including many in prison facilities. Screening and treatment of infected prison inmates are rare. (5) A recent study tells us that drug treatment of patients with any evidence of liver damage can be expected to add one year of healthy life for less than $50,000, which is considered highly cost-effective. (6)

The reaction so far in both the private and public sectors is to continue business as usual without recognizing trade-offs that would be necessary to avoid another huge escalation of health care costs. Drug companies are charging high prices without any restrictions by government, while states with their limited budgets are looking at treating just some of the sicker patients, leaving the rest of the population with hepatitis C untreated and a public health threat.

So we continue on our merry way without dealing with the problem, without admitting that we ration care or looking at the trade-offs we need to make. We ration care in the worst way--totally irrationally without dealing with the real problems. We have a classic unresolved battle between private markets and the public good. There is an obvious wide gulf between the right and left in this election cycle, with the "middle" unwilling to deal effectively with the issue and continuing the debate, as the ACA has done over the last almost-six years.

Reflecting on the urgency of containing health care costs, Gregg Bloche, M.D., J.D., professor of law at Georgetown University, gives us this important insight:

Democrats and Republicans must come together to tell Americans that we can't afford all the things that medicine can achieve--and that we must make painful choices between health care and other needs. Unless we can do so, without wielding the R word against leaders who speak frankly about these choices, serious cost control will not be sustainable. (7)

Among the three major alternatives for health care financing--continuation of the ACA, with improvements as needed, a Republican "plan" which continues such failed approaches as consumer-directed health care, selling insurance across state lines, and health savings accounts, and single-payer national health insurance (NHI), Medicare for all--only the latter will resolve the issue on the side of the common good, but still preserve a large role for private markets to compete for their share of the market based on the quality and reliability of their products, even under effective cost and price controls.

Given the failure of markets to serve the public interest, the government must have a larger role, working in such areas as negotiating drug and medical device prices through bulk purchasing (as we have done for years with the Veterans Administration), establishing a national institute free of political interference for ongoing assessment of health care services and procedures through cost-effectiveness research, and cracking down on billing fraud throughout the system.

The fix, of course, is daunting, and will require grassroots rebellion to the current situation that is pricing health care beyond the reach of individuals and families as well as government payers in such programs as Medicare and Medicaid. Beyond that, in order to combat the entrenched economic and political power of corporate stakeholders in the insurance, drug, medical device industries and others in the medical-industrial complex, we need to address broader problems, such as campaign finance reform and repeal of Citizens United.

Rationing health care as we do now--irrationally, covertly, and ineffectively--allows corporate stakeholders to maximize their profits at the expense of the common good and transfer the responsibility for care of sick people who can't pay their prices to the public sector. This is not a viable strategy going forward. Will we ever realize this, and if so, when?


  1. Palin, S. As quoted by Hoffman, B. Health Care for Some: Rights and Rationing in the United States since 1930. University of Chicago Press, 2012, and as excerpted in Scientific American, January 18, 2013.

  • Geyman, JP. Big PhRMA: blatant greed and disregard for the public interest. Huffington Post, November 18, 2015.
  • Geyman, JP. Can we ever achieve affordable health care in the U. S.? Huffington Post, November 23, 2015.
  • Ibid # 1.
  • He, T, Li, K, Roberts, MS et al. Prevention of hepatitis C by screening and treatment in U. S. prisons. Ann Intern Med (online), November 24, 2015.
  • Chahal, HS, Marseille, EA, Tice, JA et al. Cost-effectiveness of early treatment of hepatitis C virus genotype 1 by stage of liver fibrosis in a U. S. treatment-naïve population. JAMA Internal Medicine (online) November 23, 2015.
  • Bloche, G. Beyond the "R Word"? Medicine's new frugality. N Engl J Med 366: 195101953, 2012.