Please, sir, can I have some more? Wrestling with health rationing

The cost of health services rises much faster than inflation and, therefore, the growth of the tax take

This year, scarcely a week has gone by without there being a prominent media story about patients being denied access to pharmaceuticals, due to decisions made by Pharmac, or being denied access to specialist treatment or surgery by a DHB. Each time this happens, we are faced with a very uncomfortable reality – that health services in New Zealand are rationed. Given the way much of the mainstream (and alternative) media operate, the reality of rationing is interpreted as a failure of our health system, or specific organisations within it.

Sometimes, such a judgement is warranted. But in health policy, rationing joins death and taxes in the category of the inevitable. Rationing means not everyone gets what they want, but also that many don’t get what they need.

It doesn’t matter whether economic conditions are fair or foul, or how much a country spends on health. The cost of health services rises much faster than inflation and, therefore, the growth of the tax take. Over time, the average age of the population is increasing, technological innovation expands the horizon of the possible, and the health workforce becomes more specialised and skilled.

Media stories about health rationing will always be with us. In a perverse way, we should be thankful forthat because they are relatively visible in New Zealand.

It is much harder to see in countries where the main funders of health services are non-government insurance organisations.

For working-age adults in the US, the main tools of rationing involve denying insurance coverage to those who are deemed to be too much of an actuarial risk or requiring them to make hefty co-payments. Wherever people are left to directly cover their own health costs, price is the rationing mechanism.

Rationing of health services became a hot-button issue in the 1990s. In New Zealand, the debate started because the National-led Government at that time really was trying to curtail the State’s commitment to publicly funded health. But the same debate appeared under very different ideological and political conditions in the Netherlands, Sweden and Oregon.

Once the inevitability of rationing was acknowledged, the next step was to understand who was making rationing decisions: third-party payers or clinicians themselves – was rationing explicit or implicit?

Implicit rationing is what happens when a system defers all its resource decisions to individual clinical decisions, but this is likely to be grossly unfair to many people. Some clinicians will be more conservative than others in their diagnoses. Some may make decisions based on implicit and unconscious biases – “this sort of patient will never comply with the medication, so I won’t prescribe it”.

However, if we opt for an explicit process of rationing, the next questions are around which criteria to apply, and how to weight them. How important is value for money (or cost-utility, in this context)? What about equity? Should the past behaviours of patients be a consideration? (The answer here, in every country that asked this, was an overwhelming “no”.)

From there, we need to apply the chosen rationing criteria to decision-making. Is this a technical exercise or one that requires input from a wide range of participants? Pharmac is the classic case of the first approach. It certainly uses explicit criteria, and these are listed on its website. Unfortunately, few people outside of Pharmac know exactly how these criteria are applied and weighted.

There may be some good reasons for that. Making these processes more transparent might enable pharmaceutical companies to work out how to beat the house.

The downside of a closed, technocratic approach is what we see being played out now. Pharmac’s processes are opaque and, therefore, they are not understood. What would happen if Pharmac invited stakeholders to become involved in judgements about fairness, equity, value for money and benefit for Māori? The process would be more open and democratic, but then other thorny issues would quickly manifest.

Should the process include patient-advocacy groups pushing for specific treatments to be funded, or should they be excluded? And what role, if any, should pharmaceutical companies play? If we were to make decision-making more democratic and less technocratic, would there be a level playing field in these discussions? How would the interests and perspectives of patients and families who don’t have the “disease of the month” be represented in this process?

These were the questions health economists, policy experts, media commentators and government agencies debated widely in the 1990s, both in New Zealand and elsewhere. Even then, there was no clear consensus about what to do and how to do it. But at least there was a sophisticated and relatively informed debate. It looks like the time has come again to have that discussion in New Zealand.

Tim Tenbensel is associate professor, health policy, in the School of Population Health at the University of Auckland