1. Rationing in health care
With indebtedness and gratitude to Joanna Coast, Department of Social Medicine, University of Bristol, for writing a book, PhD thesis and presentation on priority-setting……
and for allowing me to plagiarise it all!!!!

2. Rationing in health care
What does ‘rationing’ mean?
Rationing with respect to efficiency or equity?
Implicit versus explicit rationing
Methods and examples of explicit rationing

3. Rationing: what’s in a name?
Economics concerned with choice between competing alternatives
Based on axiom of scarcity - resources limited relative to wants
Fundamental ‘economic problem’ is therefore allocation of these scarce resources
‘Rationing’ (and priority-setting) just another term for resource allocation

4. Rationing: what’s in a name?
“The word [rationing] is invoked to make the flesh creep, not to prompt argument about how to deal with the inescapable”
Rudolph Klein, 1992

5. Means of rationing
Market system - price mechanism establishes equilibrium (efficient allocation)
Non-market system - absence of price as allocative tool leads to other, non-price, techniques
Issue is one of: (i) philosophical basis for rationing; and (ii) applied technique for rationing

6. ‘Philosophical’ basis of rationing
Price system - objective = efficiency
consumer sovereignty
allocation by WTP/ATP
Non-price - objective efficiency or equity’?
who decides on allocation?
allocation by what criteria?

7. Objective: efficiency or equity?
maximisation of ‘benefit’
utilitarian ethic
distribution is irrelevant
Equity
just distribution
based on need? age? lottery?

8. Objective: efficiency or equity?
Philosophical basis price system/efficiency is utilitarianism
Other philosophical bases are generally pursued in non-price allocation
Which do we adopt?

9. Three important ethical theories
Utilitarian - greatest good for greatest number (maximise ‘utility’ or ‘happiness’)
Deontological - cannot ignore duty to one individual for sake of good of others
Rawlsian - ‘maxi-min’ criteria for seeking to secure good of the least fortunate in society

10. Ethics and ‘levels’ of rationing
Theories have varying degrees of applicability at population and individual level
Utilitarian and Rawlsian generally ‘population’ level, Deontological generally individual
May adopt different ethical principle at each level of rationing (decision-making)

11. Who pays?
Health Authority?
Government?
Taxpayer?

12. Who really pays?
Opportunity cost - if we choose to do one thing, the cost of doing that is the value which would have been obtained from the best alternative choice
Who pays - the person who does not receive treatment

13. Implicit or explicit rationing?
Implicit rationing: care is limited, but neither the decisions, nor the bases for those decisions are clearly expressed.
Explicit rationing: care is limited and the decisions are clear, as is the reasoning behind those decisions.

14. Rationing in the UK
“Rationing in Great Britain has been implicit…It is a silent conspiracy between a dense, obscurating bureaucracy, intentionally avoiding written policy for macroallocation (rationing), and a publicly unaccountable medical profession privately managing microallocation so as to conceal life and death decisions from patients”
(Crawshaw, 1990)

15. Rationing in the NHS Predominately implicit rationing
BUT increasing advocation of explicit rationing
1989/91 reforms
Health Committee Report
1996 Rationing Agenda Group
NICE?

16. Methods of explicit rationing
(Coast et al, Priority setting: the health care debate, John Wiley, 1996)

17. Explicit rationing: technical methods
Single principle
Little distinction between setting priorities at different levels
Examples
maximising health gain
need-based rationing
lotteries
age-based rationing

18. Technical method 1: ‘league tables’
Economic evaluation produces information on cost-effectiveness
If using comparable outcomes (eg QALY) can ‘rank’ according to c/e
Can use resultant ‘league table’ to allocate resource to most c/e first

19. League tables: handle with care!
Studies show differences in methodology
choice of discount rate
method of estimating utility values
range of costs included
choice of comparator
Requires consistent methodology, ‘admission criteria’ for inclusion, applicability in local decision context

20. The Oregon Plan
decision to stop funding for organ transplantation
Oregon Health Services Commission begins work
List 1
List 2
plan begins

21. Oregon List Version 1 Efficiency principle
1600 condition/treatment pairs
Cost/QALY gained
social values
outcome
cost

22. Oregon List Version 1
“... looked at the first two pages of that list and threw it in the trash can”
“... the presence of numerous flaws, aberrations and errors”
(Harvey Klevit, member, Oregon Health Services Commission)

23. Oregon List Version 2 Equal treatment for equal need
709 condition/treatment pairs
Method:
Development & ranking of categories
Ranking C/T pairs within categories
Public preferences
Outcome
Professional judgement

24. Oregon List Version 2 Top Five C/T pairs Bottom Five C/T pairs
1 Pneumonia - medical
2 Tuberculosis - medical
3 Peritonitis - medical/surgical
4 Foreign body - removal
5 Appendicitis - surgical
Bottom Five C/T pairs
705 Aplastic anaemia - medical
706 Prolapsed urethral mucosa - surgical
707 Central retinal artery occlusion - paracentesis of aqueous
708 Extremely low birth weight, < 23 weeks - life support
709 Anencephaly - life support

25. Technical method 2: PBMA
Split health care service into ‘programs’ and subprograms - homogenous output
Estimate current spending and outputs (benefits?) achieved by each programme
Identify ‘marginal programs’ which would be the first to be cut or expanded as budget changes

26. Technical method 2: PBMA
Identify change in output as result of adding/subtracting budget (eg £100,000)
Decision based on (re)allocation which yields greatest overall benefit

27. PBMA: panacea or poison?
+ combines pluralistic bargaining & technical exercise
+ applies ‘correct’ concept within data limitations
- problems with data - quality, absence, robustness
- subjectivity (bargaining) - who decides?
- what is the maximand - output=???

28. Explicit rationing: political processes
Processes and structures
Debate and bargaining
“multiplicity of objectives”
Micro versus macro level

29. Medical discussion and debate
Yes
Current form of decision making
Variable: therapies funded in some localities but not all
Different weight to different principles?
Yes No No
Yes

30. Public participation? Who should be involved?
What methods should be used to obtain representative views? silent voices?
How should information be presented?
How should public views be used?
What weight should public views be given?

31. New Zealand’s Core Services
Consultation Document
National Advisory Committee on Core Health and Disability Support Services
Public meetings about broad priority areas
Consultation over broad ethical framework
Panel discussions to formulate guidelines incorporating social factors

32. Success of Core Services
Incrementalism
but how much has actually changed?
Public consultation
emphasis on hearing many voices
have public ACTUALLY influenced priorities?
how have methodological problems been dealt with?
concern with “overconsultation”

33. Advantages and disadvantages
Technical
+ implied neutrality
+ clarity of objectives
data hungry
inherent value judgements
weaknesses in methods
rigidity
implementation problems
Bargaining
+ suited to uncertain and complex situations
+ decisions based upon compromise
heavily dependent on which groups are included
slipping back to implicit rationing

34. Challenges to explicit rationing
Potential impact upon the stability of the health care system
Potential for disutility arising from explicit rationing

35. Potential instability (Mechanic)
Individual strength of preference not considered
Lack of acceptance of explicit rationing
Challenges to health authority
Weakening resolve of health authority
Return to implicit rationing

36. Utility of implicit rationing
Deprivation disutility
- patients who are aware that care is being rationed may suffer a sense of grievance if they are not treated
Denial disutility
- citizens may suffer disutility from being asked to partake in the process of denying care to other members of society

37. (Evans & Wolfson, in Mooney, 1994)
"it is easier to bear inevitable disease or death than to learn that remedy is possible but one's personal resources, private insurance coverage or public programme will not support it"
(Evans & Wolfson, in Mooney, 1994)

38. “for physicians to have to face these trade-offs explicitly is to assign to them an unreasonable and undesirable burden”
(Fuchs, 1984)