Chapter 9: Distributing Health Care
Introduction
In 2010, the Patient Protection and Affordable Care Act (ACA) (outlined
below) became law. It is meant to address two long-understood problems
with American’s health care system:
• The increasing cost of health care and
• The fact that not everyone has access to a decent minimum level of health
care
The passage of the ACA does not guarantee that these two problems will be
solved. It has yet to be tested and there are many who are opposed to the
approach it takes to addressing these problems and they may seek to change
the law.
These facts almost guarantee that the debate over health care will continue.
Introduction
And part of that debate is trying to answer the question: what
constitutes an ethically fair health care system?
In this introduction we will:
• Summarize some facts regarding health care costs and needs
• Summarize the Patient Protection and Affordable Care Act (ACA)
• Review the major ethical perspectives on what constitutes a fair
health care system. The readings in this chapter explore these
perspectives in greater detail.
Health care costs
Health care costs in the US since 1960:
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1960 - $27 billion
1975 - $75 billion
1983 - $356 billion
1996 - $1 trillion
2000 - $1.3 trillion
2009 - $2.5 trillion
2018 - $4.3 trillion (projected)
Health care costs now make up about 18% of the nation’s
gross domestic product (GDP); in 1970, it was about 7%
Major causes of cost increases
Increased cost of drugs
• From 1995 to 2000, the cost of drugs doubled; from 1990 to 2000,
it tripled. Starting in 1996, the increase became about 10% a year.
Competitive limits on managed care
• Managed care can exert some control over the demand for medical
services, but they must compete for contracts. This fact has limited
the ability of such plans to constrain cost increases.
Aging population
• The median age of the population has increased and an aging
population requires more—and more
• expensive—medical care than a younger population.
Major causes of cost increases
Advanced technology
• Advances in medical technology now make it possible to provide a
greater number of services to hospitalized patients. Hence, more
people are likely to be hospitalized in order to receive the services.
Improved therapies
• Improvements in medicine and surgery now make it possible to
provide therapies for diseases that once would not have been
treated.
• The availability of such treatments means increasing the hospital
population, and the success of such treatments means that more
people will be alive who can benefit from additional care.
• New treatments are also likely to be expensive.
Major causes of cost increases
Aggressive medicine
• Americans favor aggressive treatment when faced with a
serious illness, which usually costs more money than to
wait to see how it responds to less aggressive treatments.
• The very success of medicine creates, in a sense, the need
for more medicine.
Anti-rationing attitude
• Americans are typically unwilling to accept the explicit
rationing of resources that would involve, for example,
denying heart transplants to people in their seventies or
mammograms to women in their forties.
Major causes of cost increases
Administrative costs
• Health care in the U.S. is paid for mostly by individuals
through their medical insurance, and this way of paying
for care has a costly overhead.
• A 2003 study by researchers from the Harvard Medical
School and the Canadian Institute for Health
Information found that 31 cents of every dollar spent
on health care in the U.S. to pay administrative costs.
• This is nearly double the amount spent by the
Canadian government-run system.
Effectiveness of health care spending
The U.S. spends more on health care than any other country
in the world. Here are the per person costs for the following
countries (2006):
• U.S. – $5,267
• Canada - $2,931
• France - $2,736
• Germany - $2,817
• Britain - $2160
Despite the fact that U.S. per capita spending on health care is
so much more than that of the other nations, this does not
mean we are getting better health care.
Effectiveness of health care spending
• A 2005 study in the journal Health Affairs showed that:
• Americans were far more likely to go without medical
treatment than Europeans.
• Because of their worry about the cost, a third of Americans
in the survey failed to consult a doctor when they were
sick, failed to get a test recommended by their doctor, or
failed to see a doctor for a follow-up visit after an initial
treatment.
• Forty percent of those in the survey failed to fill a
prescription because of the cost.
Effectiveness of health care spending
• Sicker adults in the other countries generally did not wait longer for
treatment than in the U.S. Americans typically have shorter waits
for elective surgery (e.g., hip replacements) than people in Canada
or Britain, but the waits in Germany were even shorter.
• Statistics collected by the World Health Organization rank the U.S.
31st in life expectancy (tied with Kuwait and Chile), 37th in infant
mortality, and 34th in maternal mortality.
• A 2009 Robert Wood Johnson Foundation report cited a study
showing that when 19 developed countries were compared with
respect to their success in avoiding preventable deaths among their
citizens, the U.S. ranked in last place.
Lack of medical insurance coverage
• The number of people without medical
insurance in 2010 was estimated to be
between 37 and 45 million (as much as 16% of
the population).
• Half of those without insurance were children
or families with children. Children themselves
made up about 25% of the uninsured.
Patient Protection and Affordable Care
Act
• In March 2010, the U.S. Congress passed the Patient
Protection and Affordable Care Act (ACA), which was
then signed into law by President Barak Obama.
• The ACA is a complex piece of legislation with
provisions scheduled to become operational at
different times. Also, some of its provisions contain
requirements stated in general terms that must be
interpreted and turned into specific rules by the
Department of Health and Human Services (HHS).
Patient Protection and Affordable Care
Act
Insurance will be required
• Starting in 2014, almost everyone in the U.S. will be required to
have medical insurance. Those who fail to get insurance will be
penalized, and those who are unable to afford it will be eligible for
subsidized coverage.
• The penalty starts at 1% of the violator’s income (or $95, whichever
is higher), then climbs to 2.5% (or $695 if that is higher) by 2016.
Families will never be required to pay more than $2,085.
• The list of those who are not required to have insurance includes
American Indians (who are eligible to receive care from the federal
Indian Health Service), as well as those who object to insurance on
religious grounds.
Patient Protection and Affordable Care
Act
• People who have incomes so low that they are not
required to file an income tax return $9,350 for an
individual are not required to buy insurance, nor are
those who would have to pay more than 8% of their
income for the cheapest plan that meets ACA coverage
requirements.
• The idea of requiring health insurance is not a novel
one. Massachusetts passed a health care insurance
reform law in 2006 under then governor Mitt Romney,
which includes a similar mandate.
Patient Protection and Affordable Care
Act
Insurance Exchanges
• People who are self-employed, have no need to work for money,
are neither poor enough to qualify for Medicaid nor old enough to
qualify for Medicare, or work for an employer that doesn’t offer
medical insurance will be able to buy it from an insurance exchange
that the states are required to establish.
• The exchanges are part of the plan to reduce health care costs
while also increasing access to insurance.
•
Such an exchange already exists as part of the fifty-year-old
Federal Employee Health Benefits program. Some eight million
federal employees can choose from over 250 medical plans to cover
them and their dependents.
Patient Protection and Affordable Care
Act
• The exchange works because all federal employees must get their
health care coverage through the plan. When exchanges have been
attempted on a smaller scale and individuals were free to go
outside the exchange to choose a policy, they were unsuccessful.
• Those who currently receive health insurance through their place of
employment may keep their present plan if that is what they want.
• To continue to support and encourage the current systems of
employer-based medical coverage, the ACA will provide subsidies in
the form of tax credits to small businesses that offer coverage to
their employees during the period 2010–2013.
Patient Protection and Affordable Care
Act
Changes to Medicaid and Medicare
• There will be changes to these programs to improve access
to health care.
• Medicaid will be changed so that not only children falling
below the poverty line receive support for their medical
care but also their parents.
• The ACA will make everyone under the age of 65 with
earnings less than 133% of the federal poverty level eligible
for subsidized medical care under the Medicaid program.
• For the first time, people without children will be eligible
for Medicaid.
Patient Protection and Affordable Care
Act
• For Medicare, a major change will be the
establishment of an Independent Payment Advisory
Board for Medicare.
• The board will be a commission of outside experts who
will be responsible for reviewing Medicare spending.
• If spending exceeds the-rate of growth predicted by
the Congressional Budget Office the Advisory Board
will make recommendations to Congress about what
steps should be taken to bring spending under control.
Patient Protection and Affordable Care
Act
Preexisting conditions
• Starting in 2014, insurance companies will no longer be able to turn
down applicants for health insurance on the grounds that they have
a preexisting medical condition.
• Until then someone with a preexisting medical condition who has
been without health insurance for at least six months is now eligible
to buy a policy from a high-risk insurance pool.
• Anyone eligible to buy a high-risk policy will receive a federal
subsidy to pay for it. The premiums the individual must pay will be
based on those for a standard population, and the annual out-of
pocket medical costs will be capped at $5,950 for an individual and
$11,900 for a family.
Patient Protection and Affordable Care
Act
No lifetime limit
• Existing insurance plans can no longer set a lifetime limit on
coverage.
No policy cancellations for illness
• Under the ACA, insurance companies can no longer cancel policies
retroactively when patients develop serious and expensive illnesses.
Preventive care without additional cost
• One aim of the ACA is to improve the health of the nation by
requiring insurers to cover, without any additional cost to clients, a
range of services (e.g., mammograms, flu shots, and HIV testing)
that will either prevent disease or identify it at a early stage, when
it is usually more effectively and more cheaply treated.
Do we have a right to health care?
• As noted earlier the number of people without medical insurance in
2010 was estimated to be between 37 and 45 million, with half of
those being children or families with children.
• This lack of coverage reflects the fact that most people lacking
insurance cannot afford it. With rare exception, if medical
insurance is available, people will use it.
• But are these facts something to be troubled about, ethically? In
particular, is there something morally wrong about the fact that a
family cannot afford to pay for medical insurance while many others
can?
• And, if there is something morally wrong, what actions are we
obligated to undertake to correct or prevent the situation?
Do we have a right to health care?
• Consider personal property. It is possible to buy insurance
to protect various forms of personal property (for example,
computer equipment) and no doubt there are some people
with such property who cannot afford the insurance.
• Lacking the money to insure a personal computer may be a
personal misfortune, but is there something morally wrong
about the fact that some people cannot afford to insure
their computers?
• Is it morally unfair that health insurance is available to
some but not others?
• What difference is there between the two cases, if any?
Do we have a right to health care?
• According to what might be called the radical libertarian
perspective, there isn’t any.
• Most of us would agree that in the case of computers, it
may be unfortunate that some people cannot insure them
but this inability does not represent some moral crisis
requiring anybody’s action. More specifically, there is
nothing unfair about the situation.
• Fairness, in the computer case, is defined by the market.
Computer insurance is fairly distributed when the insurance
is available to those who can afford it and is not available to
those who cannot.
Do we have a right to health care?
• A similar logic, the radical libertarian contends, applies to health
insurance. It may be a personal misfortune that some people lack
such insurance but we are under no moral obligation to provide it
where it is lacking.
• As in the case of computer insurance, it is the market which decides
whether health insurance is fairly distributed.
• The radical libertarian would add that any other method of
distribution would be unfair. In particular, it would be morally
wrong to cover the health insurance needs of the poor through
taxation (“welfare”).
• This is because such taxation represents theft, the involuntary
taking of honestly earned income from those who may not want to
it used to subsidize someone else’s need.
Do we have a right to health care?
• A view similar to the radical libertarian is defended by H.
Tristram Engelhardt, Jr in “Rights to Health Care, Social
Justice, and Fairness in Health Care Allocations: Frustrations
in the Face of Finitude”.
• In contrast to radical libertarianism are those who argue
that there is something morally unfair about the lack of
health care insurance for those who cannot afford it.
• On their view, the “market” criterion of fairness, while it
may accurately define fairness for the distribution of
computer insurance, does not accurately define it in the
case of health care insurance.
Do we have a right to health care?
• Access to health care, according to these individuals, is a
fundamental human value that cannot be properly viewed as just
another market commodity, like computer insurance.
• Different writers attempt to describe this special status in different
ways. Some argue that human beings have a right to health care.
Others contend that access to health care is a strongly desirable
social goal.
• But all of the writers believe that the special moral status of health
care justifies increasing access to it through regulation and taxation.
• The papers in Sections 1 and 2 of this chapter elaborate on the
themes just outlined.
Section 1: The Right to Health Care
Reading: An Ethical Framework for Access to Health Care
President’s Commission for the Study of Ethical Problems in
Medicine
• The commission claims that the role played by health
care in enabling people to live full and satisfying lives
gives it a special importance.
• The crucial role of health care explains why it ought to
be accessible in an equitable fashion to everyone in the
society.
• After reviewing various meanings of “equitable access,”
the commission concludes that fairness is satisfied if
everyone has access to “an adequate level of care.”
Reading: An Ethical Framework for Access to Health Care
President’s Commission for the Study of Ethical Problems in
Medicine
• The commission stops short of endorsing a “right” to health
care. It holds, rather, that society has a moral obligation to
provide everyone with access to adequate care.
• The government, as one social institution among others, is
not solely or even primarily responsible for providing the
access. It might be achieved by a pluralistic approach that
relies on both the private and public sectors.
• Ultimately, though, it is the government that has a duty to
see to it that society’s moral obligation to provide care is
satisfied.
Rights to Health Care, Social Justice, and Fairness in Health Care
Allocations: Frustrations in the Face of Finitude
H. Tristram Engelhardt, Jr.
• Engelhardt argues that a moral right to health care
does not exist and that such a right can be created only
by following the “principle of permission.”
• Otherwise, to assert that there is a basic right to health
care is to make a claim on goods and services that
presses others into labor or confiscates their property.
• Inequalities among people, Englehardt claims, result
from natural and social lotteries. The lotteries result in
outcomes that are both unfortunate and unfair, but the
outcomes do not require remedy by society.
Rights to Health Care, Social Justice, and Fairness in Health Care
Allocations: Frustrations in the Face of Finitude
H. Tristram Engelhardt, Jr.
• To attempt to impose a remedy in the form of an allencompassing, single-tiered health care plan, according
to Engelhard, deserves moral condemnation.
• Englehardt favors, instead, using communal resources
to provide some amount of health care for all, while
also permitting individuals to purchase additional care.
• Exactly what amount of health care will be available to
all must be determined by discussion and negotiation
within the society.
Autonomy, Equality and a Just Health Care System
Kai Nielsen
• Kai Nielsen claims that autonomy requires a society in
which equality is also a fundamental value.
• A society of equals is committed to an equality of
conditions, so everyone is equally entitled to have
basic needs met.
• Where the life of everyone matters equally, everyone
should receive the same quality of medical treatment,
regardless of the ability to pay. Hence, two- or threetier systems are unjustified.
Autonomy, Equality and a Just Health Care System
Kai Nielsen
• To achieve equality, Nielsen argues, medicine must be
taken out of the private sector.
• If physicians were put on salaries in a government
operated system, this would remove the profit motive
and allow them to practice better medicine.
• The result would be “a health care system befitting an
autonomy-respecting democracy committed to the
democratic and egalitarian belief that the life of
everyone matters equally.”
Section 2: Equality and Health Care
Equal Opportunity and Health Care
Norman Daniels
• Daniels argues that health care differs from ordinary commodities
in such a way that its distribution should not be governed by the
usual rules of buying and selling in the market economy.
• Because disease and disability restrict the opportunities that would
otherwise be available to individuals, given their skills and talents,
the distribution of health care in a just society, Daniel argues,
should be governed by the principle of “fair equality of
opportunity.”
• The normal function of the health care system, under this principle,
would be to help guarantee fair equality of opportunity to those in
the society who have been disadvantaged by disease or disability.