Transcript Rationing in health care: The Utility of Ignorance?

Rationing in health care
With indebtedness and gratitude to
Joanna Coast, Department of Social
Medicine, University of Bristol, for
writing a book, PhD thesis and
presentation on priority-setting……
and for allowing me to plagiarise it
all!!!!
M207: Health Economics
Rationing in health care
• What does ‘rationing’ mean?
• Rationing with respect to efficiency or
equity?
• Implicit versus explicit rationing
• Methods and examples of explicit
rationing
M207: Health Economics
Rationing: what’s in a name?
• Economics concerned with choice
between competing alternatives
• Based on axiom of scarcity - resources
limited relative to wants
• Fundamental ‘economic problem’ is
therefore allocation of these scarce
resources
• ‘Rationing’ (and priority-setting) just
another term for resource allocation
M207: Health Economics
Rationing: what’s in a name?
“The word [rationing] is invoked to
make the flesh creep, not to prompt
argument about how to deal with the
inescapable”
Rudolph Klein, 1992
M207: Health Economics
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 for
rationing; and (ii) applied technique for
rationing
M207: Health Economics
‘Philosophical’ basis of rationing
Price system - objective = efficiency
consumer sovereignty
allocation by WTP/ATP
Non-price -
M207: Health Economics
objective efficiency or equity’?
who decides on allocation?
allocation by what criteria?
Objective: efficiency or equity?
• Efficiency
– maximisation of ‘benefit’
– utilitarian ethic
– distribution is irrelevant
• Equity
– just distribution
– based on need? age? lottery?
M207: Health Economics
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?
M207: Health Economics
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 in
society
M207: Health Economics
Ethics and ‘levels’ of rationing
• Theories have varying degrees of
applicability at population and individual
level
• Utilitarian and Rawlsian generally
‘population’ level, Deontological generally
individual
• May adopt different ethical principle at
each level of rationing (decision-making)
M207: Health Economics
Who pays?
• Health Authority?
• Government?
• Taxpayer?
M207: Health Economics
Who really pays?
• 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
M207: Health Economics
Implicit or explicit rationing?
• Implicit rationing: care is limited, but
neither the decisions, nor the bases
for those decisions are clearly
expressed.
• Explicit rationing: care is limited and
the decisions are clear, as is the
reasoning behind those decisions.
M207: Health Economics
Rationing in the UK
“Rationing in Great Britain has been
implicit…It is a silent conspiracy between a
dense, obscurating bureaucracy, intentionally
avoiding written policy for macroallocation
(rationing), and a publicly unaccountable
medical profession privately managing
microallocation so as to conceal life and
death decisions from patients”
(Crawshaw, 1990)
M207: Health Economics
Rationing in the NHS
• Predominately implicit rationing
• BUT increasing advocation of explicit
rationing
– 1989/91 reforms
– 1994-5 Health Committee Report
– 1996 Rationing Agenda Group
– NICE?
M207: Health Economics
Methods of explicit rationing
Explicit
rationing
Political
processes
Lay
participation
Medical
paternalism
Technical
methods
Equity
Efficiency
(Coast et al, Priority setting: the health care debate, John Wiley, 1996)
M207: Health Economics
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
M207: Health Economics
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
M207: Health Economics
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
M207: Health Economics
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
M207: Health Economics
Oregon List Version 1
• Efficiency principle
• 1600 condition/treatment pairs
• Cost/QALY gained
– social values
– outcome
– cost
M207: Health Economics
Oregon List Version 1
“... 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)
M207: Health Economics
Oregon List Version 2
• 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
M207: Health Economics
Oregon List Version 2
Top Five C/T pairs
Bottom Five C/T pairs
1 Pneumonia - medical
2 Tuberculosis - medical
3 Peritonitis medical/surgical
4 Foreign body - removal
5 Appendicitis - surgical
705 Aplastic anaemia - medical
706 Prolapsed urethral mucosa surgical
707 Central retinal artery occlusion
- paracentesis of aqueous
708 Extremely low birth weight, <
23 weeks - life support
709 Anencephaly - life support
M207: Health Economics
Technical method 2: PBMA
1 Split health care service into ‘programs’
and subprograms - homogenous output
2 Estimate current spending and outputs
(benefits?) achieved by each programme
3 Identify ‘marginal programs’ which would
be the first to be cut or expanded as
budget changes
M207: Health Economics
Technical method 2: PBMA
4 Identify change in output as result of
adding/subtracting budget (eg
£100,000)
5 Decision based on (re)allocation which
yields greatest overall benefit
M207: Health Economics
PBMA: panacea or poison?
+ combines pluralistic bargaining & technical
exercise
+ applies ‘correct’ concept within data limitations
- problems with data - quality, absence, robustness
- subjectivity (bargaining) - who decides?
- what is the maximand - output=???
M207: Health Economics
Explicit rationing: political processes
• Processes and structures
• Debate and bargaining
• “multiplicity of objectives”
• Micro versus macro level
M207: Health Economics
Medical discussion and debate
Yes
Yes
No
No
Yes
M207: Health Economics
• Current form of
decision making
• Variable: therapies
funded in some
localities but not all
• Different weight to
different principles?
Public participation?
• Who should be involved?
• What methods should be used to obtain
representative views? silent voices?
• How should information be presented?
• How should public views be used?
• What weight should public views be
given?
M207: Health Economics
New Zealand’s Core Services
• 1991 - Consultation Document
• 1992 - National Advisory Committee on
Core Health and Disability Support
Services
• 1992-3 - Public meetings about broad
priority areas
• 1993 - Consultation over broad ethical
framework
• 1994 - Panel discussions to formulate
guidelines incorporating social factors
M207: Health Economics
Success of Core Services
• Incrementalism
– but how much has actually changed?
• Public consultation
– emphasis on hearing many voices
– have public ACTUALLY influenced priorities?
– how have methodological problems been dealt
with?
– concern with “overconsultation”
M207: Health Economics
Advantages and disadvantages
Technical
+ implied neutrality
+ clarity of objectives
– data hungry
– inherent value
judgements
– weaknesses in methods
– rigidity
– implementation problems
M207: Health Economics
Bargaining
+ suited to uncertain and
complex situations
+ decisions based upon
compromise
– heavily dependent on
which groups are
included
– slipping back to
implicit rationing
Challenges to explicit rationing
• Potential impact upon the
stability of the health care
system
• Potential for disutility arising
from explicit rationing
M207: Health Economics
Potential instability (Mechanic)
• Individual strength of
preference not considered
• Lack of acceptance of
explicit rationing
• Challenges to health
authority
• Weakening resolve of health
authority
• Return to implicit rationing
M207: Health Economics
Utility of implicit rationing
• Deprivation disutility • Denial disutility
- patients who are
aware that care is
being rationed may
suffer a sense of
grievance if they are
not treated
M207: Health Economics
- citizens may suffer
disutility from being
asked to partake in
the process of
denying care to other
members of society
"it is easier to bear inevitable disease
or death than to learn that remedy is
possible but one's personal resources,
private insurance coverage or public
programme will not support it"
(Evans & Wolfson, in Mooney, 1994)
M207: Health Economics
“for physicians to have to face
these trade-offs explicitly is to
assign to them an unreasonable
and undesirable burden”
(Fuchs, 1984)
M207: Health Economics