Six principles for an American healthcare system

Principle 1- We must define clearly the purpose of healthcare services

What this definition does

What this definition does not do

Many people would consider this statement subversive, for it removes from the province of healthcare services activities they would want to include: It does not require doctors to prolong life as long as possible, whatever the cost in dollars or in suffering; it does not require altering the normal progression of life (for example, halting the aging process); it does not charge the healthcare system with seeking out or administering treatments that enhance the lives of people in the absence of disease or disability (for example, face-lift surgery or hair transplants). This definition acknowledges limits to what the healthcare system can do and to what it should be expected to do.

Many would like to see a broader definition. For instance, some would require the healthcare system to provide individuals with physical, mental, and social wellbeing.

Such an inclusive definition encourages the medicalization of society, whereby various conditions not traditionally considered diseases are being redefined as such. Medicalization presents a real difficulty for us in the context of open rationing. Some people classify shyness as an illness that reduces a person's capacity for social wellbeing, for example. But do we really want people with cancer to have to compete with the shy for healthcare resources? Under a system of open rationing, we ought to limit the scope of healthcare services to real, honest-to-goodness diseases and disabilities and rescind the list of boutique illnesses our society has created in recent years.

You may or may not agree with the specifics of my proposed definition, and that's fine. But before we can begin to devise an equitable system of open rationing, we have to define the scope of healthcare services.

Principle 2 - There must be open competition for resources between healthcare services and all the other services society provides

Having defined the purpose of healthcare services, we need to prioritize that purpose in relation to all the other services society is expected to provide. These include national defense, the interstate highway system, education, the criminal justice system, garbage collection, and others. Those who think in terms of the no limits paradigm for healthcare can have trouble with the idea that healthcare has to compete with the stealth bomber for our limited public resources. But to the extent that healthcare will be publicly funded under our new system, that is the way it is; and a fair system of open rationing forces us to recognize this.

We should prioritize services through an open budgetary process, considering dollars allotted to healthcare in relation to all other necessary expenditures. We can increase healthcare benefits by allotting more dollars to healthcare, but only by reducing some other benefit-increasing the class sizes in elementary schools, for example. Having to consciously make such trade-offs may cause us to reevaluate all our priorities.

Principle 3 - As much as possible, rationing decisions should be left to the patients affected by those decisions

Rationing decisions will be fairer and more acceptable if they are made by patients themselves instead of imposed (through coercion of physicians) by a distant bureaucracy.

Not long ago, individual patients and doctors made spending decisions. Quadrant IV healthcare insulated both doctors and patients from the cost of their healthcare decisions. There was no incentive for patients to forego the most expensive testing or the newest therapy available, whatever the cost and no matter how small the expected marginal benefit.

A system of open rationing should remedy this disconnect by establishing incentives for patients to take the cost of medical services into account when making decisions about their own healthcare. The more cost-efficient the decisions patients make on their own behalf, the less rationing will have to be forced by a third party.

One way to provide such incentives is to integrate a modified form of Health Savings Accounts (HSAs) into our rationing system. HSAs provide a strong incentive for individuals to reduce nonessential healthcare spending and thus have the potential to reduce the overall level of imposed rationing that will be necessary. Later in this chapter I show how these modified HSAs would work for all Americans in a proposed new model for healthcare.

Principle 4 - Healthcare coverage must be universal

This is more than just a matter of fairness (though it is that).  All citizens, and all tax-paying non-citizens, have the right to be included in our new health care system. The reasons for this should be clear by now.  First, all taxpayers support the health care system with their dollars, and deserve to participate in it.  Second, under open rationing the limitations that the health care system imposes on all other public services, as we have just seen, become quite explicit.  All citizens have to live with those now-obvious broader limitations, and so they clearly deserve to participate in the health care system that produces those limitations.

Furthermore, all citizens (even the rich – and even Congressmen!) should be required to participate in our system of rationing. Only by including the rich and influential will the rationing system be designed with the care and consideration it deserves.

This is not to say, however, that we should prevent the rich from purchasing health care services outside the rationing system.  We should not; any system we devise simply will not work if we artificially restrain people of means from exercising their fiscal freedom.  However, we can mitigate any disruption that might be caused by such a freedom. First, we can strive to assure that truly “essential” services will be included in the rationing program, so, to the furthest possible extent, those who choose to go outside the system will be doing so for services that really are “non-essential.”  If it appears that the rich are, in fact, receiving essential health care by going outside the system, that fact would be an incentive to increase the priority of those services within the rationing system, or to increase the health care budget to allow coverage of those services. In this way, the rich can function as volunteers for “testing” the efficacy of services that society has deemed “borderline.”  Second, we would be entirely within our rights to charge individuals a stiff “external care tax” whenever they choose to go outside the rationing system.  The dollars thus collected could be added to the health care budget, and used to expand the services available for everyone else.  This tax would provide a disincentive for individuals to go outside of the system (so while they are not forbidden, they also will not be particularly anxious to do so). Such a disincentive should keep everyone, including the rich and influential, interested in assuring that truly “essential” health care services are covered under the rationing program.

Principle 5 - Clear rules of rationing must be decided in an open forum

Rules for the open rationing of healthcare should be decided from the perspective of patients (that is, of the public), not of economic, medical, policy, or ethics experts. Experts will introduce conflicts of interest. Healthcare economists will favor sacrificing fairness in favor of maximizing total societal good (more on this later). Medical experts will want to include whatever services and procedures they get paid to perform. Policy makers will want to include only services they can easily regulate. And who knows what the medical ethicists will want to do!

Only the public has the right to make these determinations. They are the ones paying for the services (because the services are not being given to them as an entitlement); and they are the ones who will have to live with the results.

Thus, whatever rationing methodologies are to be used, they must be open, widely discussed, and based on a broad consensus.

Principle 6 - Healthcare services must be prioritized according to clear ethical standards

Open rationing of healthcare must be grounded in ethics. If we were not concerned with maintaining our ethical principles, we might as well let covert rationing persist. So we have to articulate the ethical precepts we will abide by as we do the actual rationing-that is, as we prioritize healthcare services to determine what will be covered and not covered.

The ethics of rationing are not straightforward, however, because the ethical precepts we would wish to follow, instead of giving us clear guidance as to how to go about prioritizing healthcare services, contradict each other. Specifically, no rationing system can both maximize the fairness and maximize the good that is achieved with the dollars spent. We are going to have to make some sort of a choice between optimizing fairness and optimizing overall good. Such ethical decisions will be the most difficult step we'll have to take in devising a system for rationing and will be the strongest determinant of our success or failure. Furthermore, the choices we make will go a long way toward determining what kind of society we will become during the twenty-first century-and thus we should not leave these choices up to professional ethicists. They are going to have to be decided through a broad public consensus. We should therefore consider very carefully the ethical precepts that will guide our rationing.

Next: What might an upper-quadrant healthcare system look like?