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Perspectives |
1 From the Department of Radiological Sciences, University of California, Irvine Medical Center, Orange. Received December 20, 2002; accepted December 21. Address correspondence to the author, 18961 Castlegate Ln, Santa Ana, CA 92705 (e-mail: rmfriede@uci.edu)
Index terms: Economics, medical • Perspectives • Radiology and radiologists, socioeconomic issues
And God brought forth healthy vegetables so man and woman would live longer and healthy lives. And Satan created fast food restaurants with double cheeseburgers and fries.
And God brought forth running shoes to lose those extra pounds; and Satan created TV with remote control to add pounds.
And then God created quadruple bypass surgery, angioplasty, stents and drugs. And Satan created HMO’s.
Anonymous
For the average individual, the move from indemnity care to managed care seemed to replace his or her personal physician, a friendly confessor and advisor on health matters, with a cost-conscious businessman. No wonder there is dissatisfaction with managed care. However, the friendly advisor and physician had been spending too much of the gross national product and had to be curtailed. Congress was unwilling to bite the bullet and establish a single-payer national health program, so managed care became our first attempt to control costs. As I have said in previous articles, health care is an evolving process, and over the next 15 or 20 years, I believe we will end up with a single-payer system (1,2).
In this article, I will review the concept of rationing in health care and its secondary effects, for which health maintenance organizations (HMOs) have been severely criticized. However, rationing in some form has always been present in medical practice. With indemnity care, rationing was based on a patient’s ability to pay. Physicians have, in effect, always rationed care by making decisions about marginal benefits—particularly in end-of-life care—by asking: Should this patient receive therapy, which may provide only minimal benefits? If we accept the fact that our resources are finite, some form of rationing must be instituted. As the cost of care increases, rationing becomes more intense. Drug formularies are a form of rationing where individual patients can receive drugs at a lesser cost or free if the drug is accepted in the formulary advocated by the managed care organization (MCO). Limiting the patient’s choice of physician, refusing certain "research" or costly therapies, and requiring permission from the patient’s family physician to receive expensive technologic studies such as magnetic resonance (MR) imaging are all forms of rationing. Perhaps the largest and best example of rationing is our willingness to allow 40–50 million individuals to be uninsured or underinsured in order to conserve our resources (3,4).
Rationing, in effect, is withholding a potentially benefiting health care service to an individual to conserve limited resources (3). Medicare and Medicaid ration access to care based on age, income, and family composition. Even if we adopt a single-payer national form of universal health insurance, rationing will still be present. The difference will be a more level playing field, with rationing more evenly distributed. Although the economic factors suggest that rationing is necessary, rationing poses a difficult problem for physicians. Physicians, through their training, often have a compulsive need to do everything possible for the individual patient. They tend to use aggressive technology, hoping to cure or at least delay the effects of serious or even obviously fatal disease. This is especially true in end-of-life care, where large amounts of resources are spent to prolong an inevitable death. In some ways, death is the ultimate failure to the physician (5).
If we accept that our society has always rationed care, and if we accept the concept that rationing is necessary to control costs, how can we apply this to the present status of managed care? Most Americans would agree that all citizens should have the basic right to adequate health care, but despite this belief, there are about 40 million residents who are uninsured, and taxpayers are unwilling to pay more in taxes to solve the problem (6). We have created laws that provide emergency care for any individual, but this does not extend to preventive care or routine care. The paradox is that we accept the concept that everyone is entitled to basic health care but then ignore the fact that we do not provide this care. In 1993, approximately 43% of Americans believed that uninsured people are able to get the care that they require from physicians in hospitals. Despite all the publicity about the increasing number of uninsured people, in 1999 that figure increased to 57% (6).
If we agree that rationing is necessary, how should it be done? Should it be done by the physician, at the bedside of the individual patient, or should there be a group ethic, where rationing is based on guidelines or concepts of care? Many people in managed care believe that making individual spending decisions at the bedside is more efficient than trying to make global spending decisions that apply to all patients (4); however, the physician’s ethics of doing everything possible for his or her patient make this difficult to obtain. If we ration through a group ethic, this may make some physicians more comfortable and compliant, since they can justify their inability to provide for their patients because of the rules of MCOs. The method of rationing can be based on rationing the physician’s time, rationing new technologies, rationing by gatekeepers, rationing by limiting referrals, or rationing by limiting expensive procedures. Other more indirect methods of rationing include rationing by inconvenience (ie, requiring excessive paperwork or making patients wait an exceptionally long time for an appointment), rationing by policy (ie, declaring that a service is not covered), or rationing by contract (ie, stating within the contract what services are covered at each level, with the patient deciding which level and amount he or she wishes to pay) (4).
Physicians have a difficult job in trying to blend their duty to their patients, as well as their duty to society. Managed care has led to a new type of thinking: social justice rather than individual patient satisfaction. The future success of managed care hinges on how the concepts of social justice and patient satisfaction are balanced. Veatch (7) agrees that health care must be rationed, since health care resources are inherently scarce. The problem is the method of rationing. First, he believes, we should eliminate useless procedures such as a tonsillectomy that is not urgent, an antibiotic prescribed for viral infection, and a hysterectomy performed for questionable reasons. Next, he says we should look at marginally useful procedures, particularly those that are expensive. He defines a marginally useful procedure as one that occasionally does good but in the great majority of cases does not. As examples, he states, that we should eliminate obtaining computed tomographic scans for headaches, eliminate ventilators for people in persistent vegetative states, and eliminate keeping severely deformed babies—such as those with anencephaly—alive. He says that patients probably would not pay for these marginal treatments themselves but accept them if they are funded by insurance. He believes that the physician cannot make bedside decisions about rationing, since this might appear as if the physician is picking on individual people and the physician’s decision might be considered as ethnic or religious based. We must have institution-wide policies about rationing with categoric exclusions from coverage. The decision as to what should be covered goes beyond medical decisions, since they include economic, legal, and social factors. Physicians, concerned about their patients, are frequently biased by their overwhelming desire to cure. Veatch (7) acknowledges that there are, in many cases, judgment calls, such as using a more expensive drug to treat a serious infection, increasing a hospital stay, recommending a bone marrow transplant to treat breast cancer, and ordering a mammogram for an asymptomatic 40-year-old woman (7). He classifies all of these as marginal benefits but agrees that they cannot just be excluded. Who should make such decisions? He believes that the duty of the physician is to serve the patient and that the physician’s loyalty should be to the patient. Therefore, the physician who has a paternalistic attitude, as well as a doctor-patient relationship, should not be the one to decide what treatments are excluded. In other words, bedside decisions are bad. Whoever is going to make the decision, in effect, is deciding how the health care portion of the budget should be apportioned, and that person must understand that the overall budget needs to support education, housing, food stamps, and other nonmedical goods. Veatch then questions whether physicians as a group, those who are not treating individual patients, could collectively set the limits. He believes that physicians do not have the expertise. Administrators in managed care would be worse, since they have professional biases and are committed to corporate profits, and they have no medical experience. Obviously, there will be biases present in any group that attempts to apportion the health care budget.
Veatch (7) believes that managed care plans should divide their premiums into two categories and state, in advance, what percentage of the premium goes for management and profit and what percentage of the premium goes directly for patient services. Then the managers should have no interest or decision in how the patient care is allocated. His final conclusion is that we should ask the people to determine how the allocation for health care should be spent. He suggests an annual town meeting of all subscribers who would elect a representative council to actually govern the choice of what would be covered. They would decide the basic policy; they would decide whether items such as bone marrow transplants and mammograms should be covered and whether supplemental coverage could be purchased by those who want additional insurance. He suggests that this is like buying car insurance, or home insurance, and deciding the degree of coverage. Individuals who know they have a genetic tendency toward certain diseases could purchase supplemental insurance for that coverage. Finally, he states there should be a clinical manager appointed by the representative council, who makes the day-to-day decisions. He suggests that perhaps we could make this more universal by giving an entitlement of a fixed insurance coverage of perhaps $4,000 per family to all and then let people choose whatever they want (7).
Although this might be the democratic way of formulating policies, in practice this would be chaotic. Health care is too important and too personal to individuals and families, each with their own problems. However, several of the concepts have merit: Managed care should state what percentage of the premium one pays will be exclusively used for health care; the decision about how that allocation is spent should be made by a committee of physicians and patients; a basic entitlement should be provided for all families with income less than a certain amount; the ability to purchase increased levels of coverage should be provided by all plans.
MCOs realize that their major complaints center on rules regarding which services may be reimbursed. The consumer wants all services with positive expected benefits to health to be covered; the contract frequently specifies "medically necessary services"; the problem is the definition of medical necessity. Deciding what services should be provided has many problems. The effectiveness of treatment may vary in different patients. Patients’ preferences vary. One patient may prefer palliation, whereas another may prefer aggressive treatment (8). Managed care has no mechanism for eliciting the value consumers place on alternative approaches. There are other problems: the law—the law may state what can and cannot be covered in a given instance (9). Large contractors, such as the government, can in essence decree what should be covered, such as bone marrow transplantation for metastatic breast cancer. The problem with talking about medical necessity is that scientific precision is lacking in a good deal of medicine, and the concept of what is standard practice is often an attempt to make science out of art. The applied standard of care often is considered as one that is somewhere within a standard distribution curve, perhaps with 1 or 2 SDs (8). However, even this is fallacious, since patients’ concepts vary. Ideally, the treatment must be consistent with the diagnosis, should be based on scientifically proven guidelines, should be demonstrated as effective, and should be provided in the most cost-effective setting. Manshein (9) states that his definition of a covered benefit is that the patient should be cared for in the most appropriate setting at the most appropriate time for the most appropriate reason and by the most appropriate provider. However, the patient’s concept of what represents value and quality of care varies from one person to another.
The managers of managed care, the physicians and the ethicists, are still debating the future of managed care. Some physicians and ethicists view the managed care evolution as the end of medical morality, in which cost, not outcome, is the bottom line, whereas others say managed care has the potential to develop more socially responsible models (10). Although we frequently speak of medicine in moral and ethical terms, it has always been a business, as well as a profession. Many of the criticisms leveled against managed care also could be leveled against the fee-for-service method, since providing continuity of care and treating poor and uninsured patients have always been problems in our medical system. The attempt should be to regulate rationing so that, within the limitations imposed by finances, rationing produces the most benefits to the greatest number. This is much easier to state than to achieve. There are many managed care systems that strive for cost-effectiveness based on clinical competence and preventive care. However, I do not believe that the degree of social justice in our health care system should be decided by for-profit concerns (1).
Managed care reduced medical spending by approximately 10%–15% over a 5-year period, but health care costs and spending per person are now increasing (8). MCOs have tried to adapt in an effort to control escalating costs. The HMOs tried to control costs by establishing networks intended to change the physician’s practice patterns by using several approaches: by gatekeeping, where providers must determine if the patient should obtain specialty care; by using generic medications and limiting formularies; and by eliminating certain procedures and marginal benefits. About 23% of HMO enrollees are covered by plans that require their primary care physician to obtain preauthorization for an MR image of the spine. About 85% of enrollees are covered by plans that profile referral patterns in an attempt to establish practice norms and feed back this information to primary care physicians. Clinical guidelines have been established in an attempt to provide algorithms for allocating services to patients in specific instances. About half of MCOs reported that consumer surveys were used to adjust primary care physician compensation (8). However, since the bulk of the consumers are healthy, the MCOs provide most services that healthy consumers value, which may require rationing of services that are most valued to sick customers.
Currently, managed care attempts to use quality of care to determine rationing. Much of this is derived from outcomes, mortality, and readmissions, rather than from the concepts that patients value, such as quality of life, side effects, pain, and disability-adjusted life-years. How to ration services can be determined by management and physicians (supply side) or by patients (demand side). Most MCOs believed that the supply side was more knowledgeable about what treatments should be offered (8).
There have been discussions about age-based rationing, in which older persons receive lower priority (11). Many organizations do provide less intensive treatment at the end of life, since there is a question about the wisdom of investing finite resources in the care of dying persons. The value of any benefits obtained must justify the social cost incurred. However, MCOs do not like to talk about directives of how to treat patients at the end of life or limit aggressive treatment at the end of life, since they think that it suggests to patients that they will not be well treated. Those individuals without insurance receive fewer palliative measures and less access to hospice, and they have a reduction in the possibility of needed care at the end of life (11). End-of-life care is also affected by deep religious and ethical convictions, which vary considerably among individuals.
Health care is intensely personal and is now more than a trillion dollar enterprise in the United States (3). Health care is an essential social good, a service to persons in need; it cannot be a mere commodity to exchange for profits and where access depends on financial resources (2). Cardinal Bernardin, in his address to the International Association of Catholic Medical Schools, stated that all persons have a right to basic comprehensive health care of the highest quality (3). Health care must serve the good of the nation and community, as well as of the individual. There must be responsible stewardship of resources by using economic discipline to hold health care spending within realistic limits. Health care must respect local diversity, preserve pluralism, protect range of choice, and preserve the relationship between physician and patient (3).
Theoretically, managed care, by restricting cost, offers the possibility of including more persons covered by public and private insurance, but this has not occurred. We have not used the benefits of managed care to increase coverage of our population, and managed care does not provide any support for education and research within the health care system. The use of risk adjustment (ie, cherry-picking) by managed care is questionable, as it tends to avoid coverage for unhealthy people (12). Managed care has certainly created as many or more problems than it has solved.
In the past several years, consumers have become more active in health care, demanding more choice, greater flexibility, and fewer restrictions on access and service. In response to patient pressure, the distinction between HMOs and preferred provider organizations is becoming less clear as HMOs offer point of service. HMO enrollment declined by nearly 1% between 1999 and 2000; and the number of HMOs declined by nearly 9% from 613 in 1999 to 560 in 2000 (12). Many HMOs are moving away from requiring preauthorization and are streamlining the referral process, and some are doing away with gatekeepers. In some, the gatekeeper is more of a medical concierge, acting more as a coordinator rather than an impediment to care. All of this is increasing costs, and premium increases are occurring. In 2000-2001, managed care plans were increasing premiums an average of 11% across employers’ groups nationally, whereas small employers may be faced with increases as high as 20% (12). At the same time, some plans have instituted higher consumer cost sharing by increasing part payments and drug costs. Plans are attempting to eliminate lines of business that are borderline or unprofitable, and between 1998 and 2000, the number of plans serving Medicaid beneficiaries decreased 15%, and those serving Medicare beneficiaries decreased 20% (12). As the plans have moved to less restrictive care, they have lost their ability to control costs, and this has led to further premium increases and fewer affordable insurance options. This indirectly may lead to increases in the number of uninsured. In some cases, employers are reducing the benefits, and in other cases, they are canceling plans. Employers are also increasing employee premium contribution levels (13). Overall, managed care is in a catch-22, and MCOs may find it impossible to balance marketplace preferences for less restrictive care while at the same time holding down costs.
Recently, the National Academy of Sciences said that the United States health care system is in crisis and recommended testing universal insurance coverage and no-fault payment for medical malpractice in a few states (14). Administration officials said the report might become a blueprint for pilot projects to be proposed by the president. The academy stated: "The health care delivery system is incapable of meeting the present, let alone the future needs of the American Public." One in seven Americans is uninsured, and the number is rising. The group suggested that universal health insurance be tested in three to five states and that it cover all citizens and legal residents. This would be financed by providing tax credits or expanding Medicaid.
The head of Blue Shield of California is calling for universal health care starting with California (15). Bruce Bodaken stated that the current system and its underlying economics are unsustainable. Bodaken suggests building on the current system by requiring employers to offer coverage or pay into a fund. Individuals would also be required to buy coverage, and those who cannot afford it would receive government subsidies. Obviously, a new tax would be needed to help pay for the costs. Bodaken’s plan, however, does not remove insurance companies from the equation. Former Vice President Al Gore is calling for a single-payer system, and several presidential hopefuls are touting their plans for universal coverage (15). With a single-payer plan, insurance companies essentially would be out of this business.
Dr William W. McGuire, chief executive of United Health Group, stated: "The tragedy of our nations health care system is that in spite of its many impressive features it has ultimately failed to make even basic care consistently available to all our citizens" (16). He estimates that premiums are increasing as much as 30%–40% a year for small companies and 17% or more for large employers. He estimates that each percentage point increase in costs adds 300,000 people to the 41 million uninsured (16). Some health insurers in the Southeast report one in 10 small businesses are not renewing their coverage. Insurance executives see the uninsured as a threat to managed care, and many are pushing for government subsidies to cover this group.
Every month, 315,000 Americans attain the age of 50 years (12). People older than 65 years have become the most rapidly multiplying sector of the population. Older Americans tend to become more political, and they will become more active in evaluating health care in the future. Health care is already a trillion dollar enterprise, and as the population ages costs will increase. I believe that all individuals have a right to basic comprehensive health care (1). The costs will be high; there must be responsible stewardship of resources and there must be economic discipline to keep spending within realistic limits. Currently, the United States has a system of managed care (9), but it is really not manageable or caring. For-profit managed care treats health care as a commodity; I believe it should be every individual’s right.
All developed nations, with the exception of the United States, have achieved the ability to guarantee their residents universal health care (17). There are problems in all plans, and none have totally achieved the desired quality of care or solved the social disparities in health care. However, they are a major step toward providing adequate and relatively even health care to the entire country. One of the advantages of universal health care is that we create a national floor for coverage in which every individual will get certain basic coverage. We do not have this with managed care. The government must become more involved even though politicians are not eager to approach the problems of health care; but health care will be propelled by our ageing population to the top of the agenda, and the government will have to step in. We need a system of universal health care which, to be successful in America, must have steps for upgrading, where individuals can purchase additional coverage, if desired. Managed care has been our first attempt at cost-efficient medicine. It has achieved many of its goals and in many ways has improved upon the cost-effectiveness of third-party insurance. However, it has failed totally in producing universal health coverage, and as a nation, we cannot afford to allow this to continue. More than 1.4 million Americans lost their health insurance last year, with our uninsured population exceeding 41 million (18). Health care insurance rates increased 12.2% in 2001 and 8.1% in 2002, and they are projected to increase 13.6% in 2003 (18). It is time for a change. We have two choices; we can attempt a blend of private insurance and government subsidies or go directly to a single-payer system. Winston Churchill is reported to have said: "The United States will always do the right thing ... after it has explored every other option" (19).
REFERENCES
This article has been cited by other articles:
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  R. M. Friedenberg Au Revoir, but Not Goodbye Radiology, August 1, 2004; 232(2): 319 - 323. [Full Text] [PDF]
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 R. Jagsi, T. F. DeLaney, K. Donelan, and N. J. Tarbell Real-Time Rationing of Scarce Resources: The Northeast Proton Therapy Center Experience J. Clin. Oncol., June 1, 2004; 22(11): 2246 - 2250. [Full Text] [PDF]
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