Rationing in Health Care

8/6/2019 Rationing in Health Care

1/38

M207: Health Economics

Rationing in health care

With indebtedness and gratitude to

Joanna Coast, Department of Social

Medicine, University of Bristol, forwriting a book, PhD thesis and

presentation on priority-setting

and for allowing me to plagiarise it

all!!!!


2/38


Rationing in health care

What does rationing mean?

Rationing with respect to efficiency orequity?

Implicit versus explicit rationing

Methods and examples of explicitrationing


3/38


Rationing: whats in a name? Economics concerned with choice

between competing alternatives

Based on axiom ofscarcity- resourceslimited relative to wants

Fundamental economic problem is

therefore allocation of these scarce

resources Rationing (and priority-setting) just

another term forresource allocation


4/38


Rationing: whats in a name?

The word [rationing] is invoked to

make the flesh creep, not to promptargument about how to deal with the

inescapable

Rudolph Klein, 1992


5/38


Means of rationing

Market system - price mechanism

establishes equilibrium (efficient

allocation) Non-market system - absence of price as

allocative tool leads to other, non-price,

techniques

Issue is one of: (i) philosophical basis forrationing; and (ii) applied technique for

rationing


6/38


Philosophical basis of rationing

Price system - objective = efficiency

consumer sovereigntyallocation by WTP/ATP

Non-price - objective efficiency or equity?

who decides on allocation?

allocation by what criteria?


7/38


Objective: efficiency or equity?

Efficiency

maximisation of benefit

utilitarian ethic

distribution is irrelevant

Equity

just distribution based on need? age? lottery?


8/38


Objective: efficiency or equity?

Philosophical basis price

system/efficiency is utilitarianism

Other philosophical bases are generally

pursued in non-price allocation

Which do we adopt?


9/38


Three important ethical theories

Utilitarian - greatest good for greatest

number (maximise utility or happiness)

Deontological- cannot ignore duty to one

individual for sake of good of others

Rawlsian - maxi-min criteria for seeking

to secure good of the least fortunate insociety


10/38


Ethics and levels of rationing

Theories have varying degrees of

applicability atpopulation and individual

level

Utilitarian and Rawlsian generally

population level, Deontological generally

individual May adopt different ethical principle at

each level of rationing (decision-making)


11/38


Who pays?

Health Authority?

Government?

Taxpayer?


12/38


Who reallypays? Opportunity cost -

if we choose to do one

thing, the cost of doing

that is the value which

would have been obtained

from the best alternative

choice

Who pays - the person who

does not receive treatment


13/38


Implicit or explicit rationing?

Implicit rationing: care is limited, but

neither the decisions, nor the basesfor those decisions are clearly

expressed.

Explicit rationing: care is limited andthe decisions are clear, as is the

reasoning behind those decisions.


14/38


Rationing in the UKRationing in Great Britain has been

implicitIt is a silent conspiracy between a

dense, obscurating bureaucracy, intentionallyavoiding written policy for macroallocation

(rationing), and a publicly unaccountable

medical profession privately managing

microallocationso a

sto conceal life anddeath decisions from patients

(Crawshaw, 1990)


15/38


Rationing in the NHS

Predominately implicit rationing

BUT increasing advocation of explicitrationing

1989/91 reforms

1994-5 Health Committee Report

1996 Rationing Agenda Group

NICE?


16/38


Methods of explicit rationing

Lay

participation

Medical

paternalism

Politicalprocesses

Equity Efficiency

Technicalmethods

Explicit

rationing

(Coast et al, Priority setting: the health care debate, John Wiley, 1996)


17/38


Explicit rationing: technical methods

Single principle

Little distinction between setting

priorities at different levels

Examples maximising health gain

need-based rationing

lotteries

age-based rationing


18/38


Technical method 1: league tables

Economic evaluation produces

information on cost-effectiveness If using comparable outcomes (eg

QALY) can rank according to c/e

Can use resultant league table to

allocate resource to most c/e first


19/38


League tables: handle with care!

Studies show differences in methodology

choice of discount rate

method of estimating utility values

range of costs included

choice of comparator

Requires consistent methodology,admission criteria for inclusion,

applicability in local decision context


20/38


The Oregon Plan

1987 - decision to stop

funding for organ

transplantation 1989 - Oregon Health

Services Commission

begins work

1990 - List 1 1991 - List 2

1994 - plan begins


21/38


Oregon List Version 1

Efficiency principle

1600 condition/treatment pairs

Cost/QALY gained

social values

outcome

cost


22/38



... looked at the first two pages of that list and

threw it in the trash can

... the presence of numerous flaws, aberrations

and errors

(Harvey Klevit, member, Oregon Health Services Commission)


23/38



Equal treatment for equal need

709 condition/treatment pairs

Method:

Development & ranking of categories

Ranking C/T pairs within categories

Public preferences Outcome

Professional judgement


24/38



Top Five C/Tpairs

1 Pneumonia - medical

2 Tuberculosis - medical

3 Peritonitis -

medical/surgical

4 Foreign body - removal

5 Appendicitis - surgical

Bottom Five C/Tpairs

705 Aplastic anaemia - medical

706 Prolapsed urethral mucosa -

surgical

707 Central retinal artery occlusion

- paracentesis of aqueous

708 Extremely low birth weight,

Rationing in Health Care

Documents

Transcript of Rationing in Health Care