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U.S. healthcare spending is poised to grow at an average of 5.7 percent annually over the next decade, stretching government budgets with an upswing in the economy, an aging population and expanded coverage under the Affordable Care Act. By 2023, healthcare spending will account for nearly a fifth of annual GDP, up from 17 percent in 2012.
Justice requires a percentage of GDP be spent on healthcare and a clear designation of covered basic services. This approach invokes the “R” word, the third rail of all discussions about the future of health spending. The principle of distributive justice, one of the four tenets of medical ethics, requires equal treatment of all patients and equal allocation of resources. Fairness not only permits, but requires, a health system to ration -not exclude- effective medical services that some may need if it is to serve all.
We are a collective moral society. There is no reason to exclude certain members of this society from access to basic medical services due to one’s ability to pay. The cardinal merit of rationing is that it guarantees that spending for all members of society will remain within the limit justice prescribes. The trajectory for cradle-to-grave healthcare places an unsustainable burden on this country’s fiscal health. Since healthcare is not the only factor determining the health of an individual or a population, it is our moral responsibility to set limits and allow other determinants of health to be funded.
Social contract theorist John Rawls argues the principles of justice are made in agreement with those entering into a contract with us to form a society. He further argues there must be “fair equality of opportunity” for its members. Rawls’ definition of what constitutes a just society is reached under a “veil of ignorance.” This veil pre-supposes that “no one knows his place in society, his class position or social status; nor does he know his fortune in the distribution of natural assets and abilities, his intelligence and strength, and the like.” Those responsible for establishing the framework for medical services would do so not knowing their ultimate personal impact, allowing difficult and equitable policies to be formulated.
Even though Rawls was not specifically considering healthcare, his theory fits. Without good health, fair equality of opportunity is compromised. If we consider ourselves a just society, we cannot exclude individuals from basic health services that strip their chances for productive lives. Without a system of rationing care, members will be excluded. And, yes, the elephant in the room is the scarcity of money.
The Independent Payment Advisory Board (IPAB), the fifteen-member panel established by the ACA to address per capita growth in Medicare spending, has deteriorated into a conversation instead of a working body. This Board became the “death panel” of healthcare reform, slipping into a coma due to the outcry from medical organizations and Congress alike.
But, realistically, “all talk and no action” must be replaced by readiness to act. We must come to grips with the competing needs for a larger slice of the fiscal pie. It cannot be all about healthcare. Overt rationing is inevitable. However, the question remains: how do we best implement the process?
To provide basic healthcare services to everyone, a shift in the allocation of financial resources is necessary. Consensus regarding what constitutes basic care and how that cost fits within a fixed budget is required. A few examples illustrate how difficult the rationing discussion becomes when we consider where our healthcare dollars are spent and what changes may be assigned to free up resources for all.
- In 2011, Medicare spending reached close to $554 billion, amounting to 21 percent of total health expenditures. Of that $554 billion, Medicare spent 28 percent -or about $170 billion- on patients’ last six months of life.
- Dialysis, once a short-term bridge to transplant, has become chronic treatment for end stage renal disease and comes with an annual price tag of $50 billion, funded by Medicare and Medicaid. More than 100,000 candidates await kidney transplants on what has been called the “waiting list to die.”
- Nearly 13% of all babies in the U.S. are born prematurely, a 20% increase since 1990. A 2006 National Academy of Sciences report found that the 550,000 preemies born each year run up about $26 billion in annual costs, primarily related to NICU care. Factor in the cost of treating the possible lifelong disabilities and the years of lost productivity among caregivers, and the real tab may top $50 billion each year.
- Obesity in 2006 was responsible for close to 10 percent of medical costs, nearly $86 billion a year. Spending on obesity-related conditions accounted for an estimated 8.5 percent of Medicare spending, 11.8 percent of Medicaid spending and 12.9 percent of private-payer spending. By one estimate, the U.S. spent $190 billion on obesity-related health care expenses in 2005.
The list is endless, and our appetite is insatiable. From what bucket do we start to re-allocate funds to open the spigot for basic healthcare for all? The price of life matters, and how that bill is paid along the full continuum is open for debate.
Healthcare spending is not a bottomless pit. Where will the sacrifices be made for the good of society? If we adopt the veil of ignorance in setting public policy, we should arrive at a fair, albeit difficult, policy for rationing health services in a just society. Or is that just too hard for a country that repeatedly asks physicians to “do everything?”