AEI-Brookings Joint Center Policy Matters 03-16



We Ration Health Care. Better to Do It Rationally. Milton C. Weinstein.  June 2003

At my recent annual physical, my doctor found something that she thought needed further testing by a specialist. It wasn't life-threatening or urgent, but I knew that I was in for a grueling ordeal -- not from the tests themselves, but from the hassles of making an appointment and securing the proper approval from my insurance company.

What happened next will probably sound familiar: After several frustrating minutes fighting through a voice-mail menu at the specialty clinic, a recording asked me to leave my name and number. I did, but no one got back to me, so I called back the next day. Ultimately, it took three days and an hour and a half of phone time just to make the appointment. Then I had to get the insurance referral through my primary care physician's office, prompting another lengthy round of tele-menus and messages. And so it goes in the contemporary world of health care in the U.S. of A. It was so discouraging that I was inclined to forget the whole thing.

Or is that the point: to make it so time consuming and frustrating to get care that some patients will stop asking for as much medical attention? Medical providers, under pressure from insurance companies, who are under pressure from employers, are trying to find ways to cut costs. They could reduce the level of care being offered. But in America most of us think we're entitled to every possible medical technology now available. So what can providers do? They can make us spend so much time on the phone, in waiting rooms and filling out forms that we give up.

Let's step back for a minute.

Fact: There is no way for everyone to get every medical service that might do some good. It would cost billions more than employers and insurance companies and our economy could afford. So medical services have to be "rationed" -- parceled out to some and not others. It may come as an unpleasant surprise, but rationing has become a part of our health care system. The problem is, it is happening haphazardly rather than purposefully, which means that we're not getting as much for our health care dollars as we could if we confronted the problem of rationing directly rather than pretending that it doesn't exist. Despite all the talk in Congress and on the campaign trail about rising medical costs, nobody is willing to acknowledge the steps that need to be taken to maximize the value of what we spend on health care.

One form of rationing that we tolerate is to allow 15 percent of Americans to go without health insurance. The rest of us get a bigger piece of the medical care pie because the uninsured get only the barest emergency care. But even the insured experience rationing: There are many medical services that insurers limit or choose not to cover. Among these uncovered services are preventive screening procedures and treatments that most of us don't worry about in the short term, but that could make us healthier in the long run. Escalating prices for co-payments and deductibles further discourage us from seeking some medical treatments, and force us to make choices about health care even though we may not know which treatments we can most afford to do without.

There is a better way to ration health services. It relies on an evidence-based analysis of the value we get from a specific medical treatment or service. We can use established scientific methods to measure how much health benefit each service could give to every patient, in terms of longer life and improved quality of life. We can value longer life in terms of added months or years of life expectancy, and we can value improved quality of life according to people's preferences -- how much weight they place on various health improvements. By combining these two measurements, we can quantify health value in units known as "quality-adjusted life years," or QALYs. Finally, we can calculate how much each service costs and how much of the cost will be offset by future savings through prevention.

With such information, we can then rank various services according to how much benefit they offer per dollar spent -- value for money. Within a health plan, services would be provided starting from the top of the list, down to the point where the insurance company's or Medicare's money runs out. The services that offer the most health value would get the highest priority for coverage, and physicians would be entrusted with judging that value based on the scientific evidence and their patients' preferences. It's still rationing, and some people don't like the very idea of it. But it's better than the arbitrary system we have. Doing it this way will improve health care, and the affordability of health care, for more people. This is rational rationing.

To make this real, consider some widely recommended cancer screening tests. Annual mammograms probably do save lives, but according to studies in leading medical journals, the added value compared with doing mammograms every two years is probably fewer than 10 QALYs for every $1 million spent on screening women over 50. Contrast this with screening every woman over 50 for colon cancer every 5 to 10 years, which would yield about 50 QALYs for the same $1 million. In other words, we could save more quality-adjusted years of life -- 5 times as many in this example -- if mammograms were done every two years and the money saved was spent instead on giving every woman a colonoscopy every 5 to 10 years. But at the present time, more women get annual mammograms than ever get screened for colon cancer.

Here's another example. Pap smears every few years to prevent cervical cancer are a health care bargain, at more than 100 QALYs gained for every $1 million. But the costs and benefits of an annual Pap screening are quite different. According to estimates from many independent studies, yearly Pap tests add just a few hours to quality-adjusted life expectancy of the average woman, above and beyond the gains from less frequent testing. But the expense of more frequent testing (and the abnormal results that some of them produce, requiring still more follow-up tests) are huge, adding up to as much as $20 billion nationally. This amount would produce far more health benefit if it were spent on screening these women for colon cancer, or treating their high blood pressure, or reducing their risk of osteoporosis.

Doctors are beginning to think in terms of value for money, and we should encourage this, not be alarmed by it. We should want our doctors to help us to get the most benefit from our health care dollars. This kind of value analysis can go a long way toward controlling the spiraling cost of health care in America. It's certainly more rational than trying to control health care costs by making consumers decide what services to get based on price, or making things such a hassle that some people will go away and get nothing.

Oops, my phone is ringing; maybe it's the insurance company returning my call returning its call returning my call . . . .

Milton Weinstein is the Henry J. Kaiser Professor of Health Policy and Management at the Harvard School of Public Health and directs the Program on Economic Evaluation of Medical Technology within the Harvard Center for Risk Analysis.

This article was originally published in the Washington Post on Sunday, June 1, 2003.