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The Consequences of Covert Rationing

We've agreed that rationing in any form is bad.  But, while there's no doubt that devising a fair system of open rationing would be difficult and painful, the ultimate consequences of covert rationing are even more terrible.  

As we have seen, chief among the perfidies resulting from covert rationing is the deliberate, systematic destruction of the doctor-patient relationship.

The central authorities who are expected to control healthcare costs have a lot to gain by accepting this grave responsibility (for governmental bureaucracies, incredible power; for insurance executives, incredible profits). But they have to work very hard for that gain, because it is going to be extremely 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, as we have seen, is to institute some form of rationing. But at the same time they cannot ration openly. They cannot accomplish the necessary rationing simply by decree or even by open negotiation; nor can they be particularly ham-fisted in enforcing the rationing. Instead, a relatively subtle, covert, plausibly deniable kind rationing is necessary.  With a little thought we can see that this constraint leaves them with only one good choice.

Namely, they need to coerce the doctors into doing the rationing for them. So, to the fullest extent possible, covert rationing must occur at the bedside, during the physician - patient encounter.  

Happily for them, the central authorities have many methods for coercing the behavior of physicians, all of which stem from the fact that 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 that they instead take pains to keep their true "customers" satisfied. To a very large extent the medical profession has caved in to this pressure, albeit under great duress.

A direct result of covert rationing, then, 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.  For we simply cannot have both covert rationing and an intact doctor-patient relationship at the same time.  

The systematic destruction of the doctor-patient relationship, as important as it is, is merely one manifestation of a general truth about covert rationing, namely, that covert rationing corrupts everything it touches.

In the following three sections of this discussion we will elaborate on this general truth. We will see how covert rationing has corrupted the principles of managed care, the regulatory environment of the healthcare system, the ethical issues surrounding end-of-life care, and even the founding principles of American society.

As we survey all this societal corruption, one less obvious manifestation of covert rationing will gradually become clear to us: covert rationing profoundly abhors simplicity and straightforwardness.  Byzantine policies, self-contradictory directives, tangled incentives, and endlessly shifting regulations assist greatly in keeping the flow of money and resources in the healthcare system an utter mystery. The resulting confusion is essential for creating many of the subtle incentives necessary to produce covert rationing. This is why each of the efforts that are periodically initiated to simplify and streamline healthcare, sometimes introduced with great fanfare, invariably becomes gummed quietly to a halt within the bureaucratic molasses, just one more layer of glom in a vast conglomeration of regulations.  All this systematic confusion is hugely inefficient and wasteful, and in fact negates most if not all the savings produced by the rationing itself.

And herein lies the great irony of covert rationing, the final joke.  When we attempt to conduct the necessary rationing covertly, the need to keep the rationing covert quickly becomes the primary objective, even more important than actually reducing costs. Obvious improvements in practices, processes, or technologies that, if implemented, would greatly reduce the cost of healthcare, will often, through the transparencies they create, threaten the bureaucracies that keep rationing covert - and therefore they will be stifled or suppressed.  

This phenomenon makes life very difficult for everybody.  For instance, companies whose products are aimed at making healthcare more efficient or cost effective have met utter failure by assuming that the healthcare system will embrace their efforts, that is, will pay for these benefits. Unfortunately, if in addition to saving money, their products also threaten the infrastructure of covert rationing, they are destined to be very disappointed with the results.

To summarize,

our current healthcare system is so wonderfully and intractably dysfunctional precisely because it operates under a paradigm of covert rationing. We're not dealing with an essentially sound healthcare system that just happens to have a few aberrancies here and there that we can simply identify and fix.  We're not merely dealing, for instance, with a problem of funding. Essentially it doesn't matter whether we're going to get the money to place in those centralized pools through the government or through insurance companies, or whether we have one centralized federal agency to administer American healthcare or several private ones. Because no matter how we get the money, and no matter how big we make those pools, and no matter who controls them, we're still going to have to ration. And unless we're ready to sacrifice one or both of our competing cultural imperatives (entitlement vs. no limits), we're going to ration covertly.

So we're not dealing with a system that can be tweaked into goodness. Instead, we're dealing with a healthcare system that - no matter what commonly discussed reform is put in place - fundamentally traffics in covert rationing, and thus in which complexity, inequity, and inefficiency are foundational operating principles.

Having reached this less-than-uplifting conclusion to the rationing question, let us now examine how covert rationing and its most personal manifestation - the destruction of the doctor-patient relationship - affects American patients every day.  

We'll begin by looking at modern managed care.