On Rationing

by Peter Suderman 

I normally cringe my way through Michael Gerson columns, but I think this is just about right:

Talk of "death panels" is the parody of the debate -- hyperbolic and self-defeating. But a discussion about the prospect of rationing in a public health system is not only permissible but unavoidable. Every nation that has promised comprehensive, low-cost health coverage for all citizens has faced a similar dilemma. Eventually it is not enough to increase public spending or to reduce waste. More direct forms of cost control become an overwhelming priority. And because health expenditures are weighted toward the end of life, the rationing of health care often concerns older people most directly.

Keith Hennessey, former director of the National Economic Council, puts the dilemma simply: "Resources are constrained, and so someone has to make the cost-benefit decision, either by creating a rule or making decisions on a case-by-case basis. Many of those decisions are now made by insurers and employers. The House and Senate bills would move some of those decisions into the government. Changing the locus of the decision does not relax the resource constraint. It just changes who has power and control."

As I've written before, I think warnings about rationing are a red herring. The word is typically off-limits in reasonable health-care conversations -- politicians don't like admitting that not everyone will get everything they want -- and thus when it is used, it tends to be to scare people. But the fact is, health-care resources are limited; we already ration them through the current mesh of employers, insurers, and government agencies and regulations; and the question is not whether to ration, but who gets to make decisions about care and how. 

Leave decisions to central authorities, and individuals and providers tend to have fewer choices, and innovation tends to proceed somewhat more slowly. Leave decisions in the hands of private entities, and care tends to be spread less evenly. Beyond the hyperbole on both sides, the fact remains that no matter how one structures the rationing process -- whether it emphasizes government or the private sector -- there are always trade-offs.