Rationing care vs increasing taxes – the health system sustainability myth

One person’s rationing may be another’s priority setting. Shutterstock

In the lead-up to the May budget, the seemingly inexorable rise in health spending has unleashed a “sustainability panic”: rhetoric that health system costs are out of control and drastic measures are needed to make the system affordable.

Sustainability panic is often used to justify shifting the burden of controlling health spending from the wider society to a vulnerable few – people with poor health who frequently go to doctors and hospitals, for example, or those with high needs and potentially shortened life expectancy. Proposals to limit access to care or to introduce co-payments for doctor visits would fall heavily on these groups.

Rationing health care is seen as a potential solution to the presumed cost explosion; the alternative being tax increases or some other unpalatable solution.

Lists of rationing targets abound, but typically they include dialysis for over 75s, hip replacements for the elderly, and tailored cancer treatment. The generic description is interventions that are high-cost but have a “low return”. The policy question is phrased as whether society at large is prepared to keep paying for them.

These discussions are generally framed in terms of a false dichotomy: rationing or increased taxes. But there are other options. Policymakers should direct their attention to eliminating waste and respecting patient choices about their end-of-life care for a more cost-efficient and equitable health system.

Health rationing

Rationing of health care already exists both implicitly and explicitly. Language is vital in this area: one person’s rationing may be another’s priority setting.

At the system level, rationing is explicit. Australia has led the world in trying to ensure that new, publicly subsidised treatments – both new drugs and new medical interventions – meet standards of cost effectiveness. In other words, the costs of new interventions need to show commensurate benefits in terms of additional quality-adjusted life years or costs averted elsewhere in the system.

Rationing also occurs in public hospital care. In 2011-12, over 600,000 people were admitted to public hospitals for elective surgery, with wildly varying waiting times. Half were admitted within 36 days of going on the inpatient list, while 10% waited more than 250 days, with significant differences among states. In Tasmania, 10% of patients waited almost a year (348 days).

Some patients wait years for elective surgery. Ocskay Bence/Shutterstock

These inpatient waits were on top of waiting for out-patient appointments, the so-called “hidden” waiting list. No data are publicly available, but media reports suggest this can add two years to the wait for care.

Implicit rationing decisions are made in the options put before patients. Clinicians in England and the United States have very different perspectives on what options patients should be given. At what age is it legitimate to start a person on dialysis for example? Australian clinicians are probably somewhere between the two.

Implicit rationing is often informed by clinical judgements about the risks of surgery, and different clinicians will weigh up these judgements differently.

What advocates of rationing rightly suggest is that implicit rationing should be made explicit and that the criterion be changed from a clinical judgement to one based on cost effectiveness.

Eliminating waste

The first priority for ensuring the health system is affordable should be that all necessary care is provided efficiently. This is not the case – previous Grattan Institute reports have shown that billions of dollars are wasted in the health system every year.

First, we pay too much for pharmaceuticals, way in excess of what is paid in other countries. Negotiating better deals with drug companies for medicines listed on the Pharmaceutical Benefits Scheme (PBS) could save A$1 billion a year.

Second, not all public hospitals are equally efficient. Avoidable costs are endemic in the hospital system and eliminating those could save at least a further billion dollars a year.

Third, not all care is necessary. Rates of admission to hospital vary substantially, with the variation not able to be explained by either underlying differences in the health of the population or in health outcomes. Superseded treatments are still being provided.

Finally, best-practice guidelines are not being followed and high out-of-pocket costs are leading patients to defer needed care. Both situations may lead to higher downstream costs. One paper has even suggested that if only evidence-based care was provided, there would be no need to discuss rationing at all.

Better end-of-life decision making

Even if the nirvana of a waste-free health system were achieved, there will be cases in which people might question whether certain treatments are worth the cost. After all, any decision about whether to subsidise new pharmaceuticals or medical treatments is a form of explicit rationing.

Outside this systemic level of evaluation, however, the health system fails patients at the level of individual treatment choices – and it fails society.

Drawing on the experiences of their mother’s treatment in the United States, medical historian Jackie Wolf and her brother Kevin, an actuary with health-care experience, tell a harrowing tale of interventionist cancer treatments. The cancer specialists all offered hope, recommending many more interventions and giving above-average prospect of survival. Only their mother’s general practitioner was honest enough to tell her that her condition was terminal.

We should focus on whether a patient is being treated with dignity in the choices he or she is being offered. Jenny Sturm/Shutterstock

The rationing frame questions interventions where the treatment costs are high and the benefits low. This is the wrong frame. The broader challenge should be to ensure patients’ treatment choices are respected.

We all die. Medical intervention will not change that, but it can change whether a person dies as a result of a particular injury or illness during the current episode.

The health system will better serve patients who are likely to soon die if it discusses more realistically the chance of death and the benefit health-care interventions can offer. Will the patient be restored to “perfect health” or will he or she live with significant disabilities, and if so, of what kind?

We should focus on whether a patient is being treated with dignity in the choices he or she is being offered. Are the treatment choices being made in an environment of collaborative decision-making or are they based on medical hubris that avoids discussions about whether the treatment is likely to prolong both life and quality of life?

If these discussions were held with the right balance of sympathy and candour they would probably reduce costs, as fewer high-cost-low-benefit treatment options would be pursued.

Even so, some patients and their families may still want to pursue all options, and that’s okay. It would be a sad day for health care in Australia if treatment choices were made based on a taxi meter ticking by the bed.