Friday, September 16, 2011


When the subject of healthcare reform arises, I don't get involved much in its economics, since whatever plan we ultimately adopt will bankrupt us…unless we "ration" healthcare.

Ah, the R word. The phrase "rationing healthcare" is political poison, but what exactly does it mean?

When I was a kid, there was no such thing as health insurance. People paid for care retail, out-of-pocket, buying only what they could afford. Don't have enough money for that serum you need? Well, get a loan from someone or go without. To be fair, though, this was before the great blooming of medical technology, and care was much cheaper.

When insurance companies got into the act, they weren't going to pay for just anything, so they set up rules, guidelines, parameters. That's rationing, too. Medicare, which cranked up in the mid-1960s, did the same. In fact, any healthcare payer that decides to operate without payment boundaries will soon go belly-up.

So instead of flying into hysteria when we hear the R word, let's consider calling it what it actually is. This blog is loosely named after the title of a classic book by E.F. Schumacher, Small Is Beautiful: Economics As Though People Mattered. Schumacher's principal advice was to address problems in reasonable scale. His phrase, "appropriate technology," meant that you you don't need a 3,000 kilowatt power plant for an village well in India, that every home garden doesn't need its own tractor, and that every head injury doesn't require an MRI.
In healthcare, sometimes clinical judgment will call for expensive technological intervention, and fortunately, it'll be there when when it's needed. When it's not needed, it shouldn't be done--not because of "rationing," but because we'll be using technology appropriately. 

1 comment:

  1. Rationalization of the healthcare system is very important. I agree that it is better to use the word R-factor instead of the "ration". It is less debatable. But whatever it is, there is utter need of such initiatives and the induction of technology is obvious.