Affidavit: Healthcare and the Law -The Healthcare Debate: How Do We Talk (or Not Talk) About Rationing Services?

Contributor: Lisa W. Clark, JD’89 
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1242.jpgAs the healthcare reform debate rages on, the public is grappling with macro questions - “How can we spend less?” and personal concerns - “How can I and my family get the care I need and want?” Given the financial unsustainability of our current system, the debate focuses on cost issues, and so we look for structural solutions, like lifting mandates on insurance coverage, replacing the provider fee-for-service reimbursement model with one based on quality performance, better deploying technology within the healthcare system, and making Medicaid a State block grant program.  Underlying these discussion points is the issue of who gets what, otherwise known as rationing.  Of course, healthcare goods and services are already rationed through benefit limitations and socioeconomics status, but reform requires further rationing.  For most consumers, it can be difficult to imagine denying care to someone else, especially for life-and-death treatment; recall the debate prior to the passage of Obamacare over alleged government “death panels” that would determine who would live or die based on access to services.  But the public needs to address head-on the health consequences of limiting services in order for a viable, long-term reform solution to emerge.  Business leaders, academicians, and politicians can assist in that debate by ensuring that rationing care is a significant part of the discussion. 

Imposing a strict rationing system is not new, as illustrated by an effort by the Oregon Medicaid program two decades ago.  In 1994, the State introduced a rationing program that categorized and then prioritized services for Medicaid beneficiaries based on factors such as age, medical condition, the likelihood of a successful outcome, and the expected quality of life or life expectancy post-service.  For example, it was hotly debated whether a particular individual should receive a costly bone marrow transplant when there was a reasonable chance the transplant might not be successful.  The program created a lot of controversy - the public was not comfortable with the prioritization of services, particularly those that could result in death – and the strategy was ultimately retired in favor of different approaches, including managed care (thereby shifting the burden of determining services to the plan).

Life-and-death issues are central to any discussion on rationing.  According to the Kaiser Foundation, roughly 25% of Medicare spending goes to beneficiaries in the last year of life. And regardless of one’s position on when life begins and therefore when services should become available, it is important to recognize the cost of supporting a pre-term infant with complex conditions can easily run into the hundreds of thousands of dollars or more.  Efforts to educate the public on avoiding pre-term and elective deliveries and promoting end-of-life planning may ameliorate but will not solve these challenges.  We may never come to consensus on the questions of when life begins or ends, but a full and open dialogue on the associated costs is necessary.

Another way to ration services in order to reduce costs is to limit the use of the emergency department.  The federal law known as the Emergency Medical Treatment and Active Labor Act (EMTALA) requires that any hospital with an ED must screen and stabilize any individual who comes to the ED whether or not they have insurance and no matter their complaint.  Although efforts are underway to limit the use of the ED for non-emergent services like sprained ankles, nevertheless, if the consumer presents at the ED, s/he must be screened and stabilized.  And, the ED serves as the entry point for inpatient care, the most expensive type of care.  If we truly want to reduce ED care, EMTALA should be amended to close the ED to some or all populations or for certain services. For instance, the ED could still provide catastrophic care following a car accident but not services for an existing condition that could or should have been addressed outside of the ED, such as for asthma or end-stage cancer.  As with the Oregon Medicaid experiment, the public may not be comfortable with developing charts of who gets what in the ED.  But the fact remains that the current use of the ED is not viable, and one solution may involve limiting its open use. 

Substance abuse and mental health also offer significant opportunities for cost reduction through rationing.  A common complaint is that successful mental health and substance abuse outcomes are difficult to measure; even if the addict sobers up, relapse is always a concern.  Behavioral health conditions are very expensive to treat and result in steep costs to employers for lost time and increased plan benefit costs, as well as to the government for public services such as jails and shelters for persons suffering from substance abuse and/or mental illness.  The Mental Health Parity Act of 1996, the Mental Health Parity Equity Act of 2008, and the 21st Century Cures Act each built on one another to ensure that mental health and substance abuse treatment benefits were treated no less favorably than medical/surgical benefits, for instance by requiring plans to impose lifetime dollar limits equally for behavioral health and medical/surgical health services.  Although parity remains in effect under the law, there are significant exceptions that apply to the Medicare and Medicaid programs and in other situations.  Most reform efforts would eliminate parity and whittle away at behavioral health services.  Limiting these services may result in initial savings to the healthcare system but reflects a choice to forego certain kinds of care to large swaths of the population, and, additionally, untreated mental health issues eventually further exacerbate the cost of care, particularly when there is such a heavy, and increasing, chronic disease burden in the U.S. population as a whole.

The examples above are freighted with ethical and legal issues that won’t be easily solved now or ever.  But there should be more discussion about care rationing, even when it doesn’t involve life-or-death matters.  Here’s an (arguably) easier question:  Should Medicare pay for knee surgery for every 90-year old?  I might argue in the negative right now, but I’m sure I’ll want my knee surgery when I’m 90. 


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Disclaimer: This article is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this article are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.