Ration Wisely

All of economics is the study of rationing, because no resource in infinite. Efficiently allocating finite resources is the heart of any economics discussion, health care economics included. Which is why I don’t get how every discussion of changing how our health care system immediately prompts screams of “Rationing!” Well, of course! Since we don’t have infinite doctors, infinite medicine, and infinite time, we are going to have to ration things somehow. The question is, how?

The latest discussion around encouraging doctors to consider the costs of treatment prompted the most recent rants about rationing and how this will lead to Soviet-era lines for toilet paper in our doctor’s offices. Again, this is missing the point entirely: rationing is going to happen regardless, so how do we do it? This smallest of first steps, where doctors think about the relative costs of different treatments that have pretty much the same outcome, is about as milquetoast a step you can take and still be effective, yet the hemming and hawing started regardless.

Why don’t we ever have discussions around the other kinds of rationing going on in our health care industry? The article above mentions Avastin and Lucentis, also referenced in this great article about Medicare pricing. Avastin is $50, Lucentis is $2,000, and they both have pretty much the same outcome. However, when you have a finite amount of money, prescribing Lucentis instead of Avastin means that 39 fewer people can be treated for the same dollar amount. That’s a 97.5% reduction in treatment, which is a hell of a number, but for some reason that kind of rationing has been just fine. The converse of this is what some doctors’ groups are suggesting we do: remember the extra 39 people that we could treat for the same amount. And that is rationing we should be worried about?

I’m not even going to start talking about the most fundamental form of rationing in this country: the millions of people who don’t have health insurance that find it difficult, and very expensive, to get treatment. Again, that rationing is far more acceptable for some reason.

Rationing happens in health care, has always happened, and will continue to happen until we find alternative laws of physics. The question we should ask is how we ration, and to me, starting by choosing the cheapest option when treatments have the same efficacy seems to be a good, and innocuous, start. It’s certainly better than the ad hoc rationing we have in place now.