Why Quadrant III is inevitable

Just as there are powerful forces pushing the healthcare system leftward, toward centralized decision-making and thus toward rationing, so is there an equally powerful force pushing it downward, into Quadrant III, and away from Quadrant I.

That force is the culture of no limits. That and the entitlement mentality are the two main cultural imperatives shaping the American healthcare system today. Unlike the entitlement mentality, which is nearly universal in Western countries, the culture of no limits is uniquely American.

The Culture of No Limits

In America we have and will continue to have the best healthcare in the world, the best doctors, the best hospitals, and the best technology. Since one cannot place a price on human life, everything that can be done for a sick person must be done, as long as there is some small hope of a beneficial outcome. Finally, every disease is potentially curable, and as a matter of policy we will strive to learn how to cure every disease, death itself being merely a manifestation of insufficient technology. In summary, where healthcare is concerned there are and can be no limits.

So, at the same time we find ourselves up against inherent spending limitations that require rationing, we find that there can be no limits.

These two fundamental tenets-the entitlement mentality and the culture of no limits-are incompatible with one another. And our need to simultaneously hold onto these two incompatible but necessary imperatives is strongly driving our healthcare system toward Quadrant III, toward a system of centralized, low-quality healthcare decisions. Quadrant III is the only place on the healthcare landscape where we can create a centralized entitlement program operating under the fiction that no rationing is necessary.

Quadrant III allows for low-quality healthcare decisions, and so offers a haven from which to entertain our two mutually exclusive cultural imperatives. We can ration while declaring there are no limits. We can deny that any rationing is occurring at all. We can ration deceptively. We can ration covertly.

Thus, we reach the Second Corollary of the GUTH:

Second Corollary of the GUTH: Quadrant III Healthcare = Covert Rationing

That is, Quadrant III healthcare and covert rationing are identical, one and the same.

Life in Quadrant III

The Second Corollary shows that covert rationing is the hallmark of Quadrant III healthcare. This goes a long way toward explaining the chaos, confusion, and inefficiency that plague today's healthcare system. I give the mechanisms and consequences of Quadrant III healthcare a full treatment in my book, and in the Understanding It section of this website. Here I just want to mention two of its more important manifestations, which are embodied in the Third and Fourth Corollaries of the GUTH.

Third Corollary of the GUTH: Covert Rationing Destroys the Doctor-Patient Relationship

The central authorities we have deputized to control healthcare costs have a lot to gain by accepting this responsibility (for governmental bureaucracies, incredible power; for insurance executives, incredible profits). But they have to work hard for that gain, because it is going to be difficult, if not impossible, to control healthcare costs under even the best of circumstances.

And the central authorities are not working under the best of circumstances. Their only option is to institute some form of rationing. But they cannot ration openly. They cannot accomplish the necessary rationing by decree or even by open negotiation, nor can they be ham-fisted in enforcing the rationing. Instead, a subtle, covert, plausibly deniable kind rationing is necessary. This constraint leaves them with only one good choice: They need to coerce the doctors into doing the rationing for them. So covert rationing must occur at the bedside, during the physician-patient encounter.

The central authorities have many methods for coercing the behavior of physicians, because they have empowered themselves to determine the individual physician's viability as a practitioner. The central authorities have at their disposal an arsenal of subtle weapons, and an occasional nuke, to assure that doctors relegate the needs of their patients to a secondary position and instead take pains to keep their true customers-the central authorities-satisfied. The medical profession has mostly caved in to this pressure, albeit under duress.

A direct result of covert rationing is the systematic destruction of the classic doctor-patient relationship-the relationship under which doctors are supposed to act from a position of trust, solely as their patients' advocates, and to place the needs of their individual patients above all other considerations. We cannot have both covert rationing and an intact doctor-patient relationship at the same time.

The loss of the traditional doctor-patient relationship has profound implications, which are discussed in the Understanding It section of this website.

Fourth Corollary of the GUTH: Covert Rationing Corrupts Everything It Touches

My book spends an entire section elaborating on the Fourth Corollary. There I show how covert rationing has corrupted the principles of managed care, the regulatory environment of the healthcare system, the conduct and analysis of medical research, the ethical issues surrounding end-of-life care, and even the founding principles of American society. Much of this material can be found in the Understanding It section of this website as well.

But a less obvious manifestation of the Fourth Corollary is that covert rationing abhors simplicity and straightforwardness. Byzantine policies, self-contradictory directives, tangled incentives, and endlessly shifting regulations help keep the flow of money and resources in the healthcare system a mystery. The resulting confusion is essential for creating many of the subtle incentives necessary to produce covert rationing. This is why the efforts periodically initiated to simplify and streamline healthcare, sometimes introduced with great fanfare, get stuck in the bureaucratic molasses, just one more layer of glom in a vast conglomeration of regulations. All this systematic confusion is inefficient and wasteful and negates most if not all of the savings produced by rationing in the first place.

Herein lies the great irony of Quadrant III healthcare, the final joke: In Quadrant III, the need to keep the rationing covert quickly becomes the primary objective, even more important than actually reducing costs. Indeed, improvements in practices, processes, or technologies that, if implemented, would reduce the cost of healthcare often, through the transparencies they create, threaten the bureaucracies that keep rationing covert-and therefore they are stifled or suppressed.

Quadrant III healthcare is therefore a black hole, utilizing the most unfair, dangerous, and destructive methods of healthcare rationing that can be devised - and at the same time guaranteeing that cost savings (the original reason for rationing) are not realized.