Health Law and Ethics
Rationing Health Care and the Need
for Credible Scarcity:
;Why Americans Can't Say No
Wendy K Mariner, JD, LLM, MPH
Introduction
Most Americans recognize a need to
control health care spending, but few
outside academic circles are willing to talk
about rationing care. During the 1994
debate over health care reform, all of
those involved seemed careful to avoid
what might be a fear of rationing in this
country. Albert Jonsen wrote that al-
though he was not aware of any polls that
demonstrated that Americans "fear" ra-
tioning, he "certainly recognize[d] dislike
of the concept of rationing health care."'
This does not mean that there is no
rationing in America. Rudolf Klein has
noted that an outsider eavesdropping on
the US health care debate would be
astonished at the "American delusion
that health care is not rationed in the
United States."2
Health care rationing in the United
States is primarily rationing by price
(health care goes to those who can pay the
price asked); this type of rationing is often
.'....4. invisible or ignored.3 When health care
rationing is recognized, it is often viewed
as withholding care from those in need,
especially those unable to pay.4 Dictionar-
ies define "ration" as "to put on a fixed
allowance"5 or to restrict to limited
allotments, as in wartime.6 The associa-
tion of rationing with wartime restrictions
on the battlefield or at home means that
the word often connotes deprivation,
usually of something people need and
want, but for a limited time and for a
noble cause.7 When the idea of rationing
is applied to health care resources in
general, and apart from wartime restric-
tions, it should not be surprising that the
focus is primarily on deprivation and not
on any noble cause.
The concept of rationing used in
discussions about health care is an "equi-
table distribution of scarce resources."8'9
If rationing is intended to permit every-
one to have a fair share of scarce
resources, why is it not enthusiastically
embraced by everyone? After all, as
David Eddy remarked at the Medical
Necessity Symposium held in Washing-
ton, DC, in April 1995, who wants an
inequitable distribution of scarce re-
sources?
If rationing is the allocation of scarce
resources, then, in deciding whether or
what it is necessary to ration, the thresh-
old question is, Are the resources scarce?
If not, there is no need to ration because
there is plenty for all. If the answer is yes,
however, there is, in fact, rationing. It is
no longer a question of whether but
how.8'10 Resources will be distributed, one
way or another. If there is not enough to
satisfy everyone, the only remaining issue
is how to ration: What method should be
used to divide up the scarce resources?
Most rationing arguments have con-
cerned what method should be used and,
especially, what counts as an equitable
distribution of scarce resources." It is
easy to understand why people could
disagree on rationing criteria. Indeed,
such disagreements are so intractable that
it often appears that no consensus can be
reached. But it may be that, by focusing on
rationing methods, the debate has over-
looked an alternative explanation for
resistance to the idea of rationing: the
threshold requirement of scarcity.
It is possible that most Americans
simply do not believe that rationing is
necessary because they do not believe that
health care resources are scarce, espe-
The author is a Contributing Editor of the
Journal.
Requests for reprints should be sent to
Wendy K. Mariner, JD, LLM, MPH, Boston
University School of Public Health, 80 E
Concord St, Boston, MA 02118-2394.
American Journal of Public Health 1439
Health Law and Ethics
cially in this era of excess hospital capacity
and underemployed medical specialists.
The hypothesis just offered is complicated
by the prevalent belief that everyone is
entitled to live as long as possible and to
be as healthy as possible and that a long,
healthy life is ordinarily attainable, given
enough health care. The combination of
these two beliefs may account for the
negative connotation of rationing as depri-
vation of apparently available care to
which people are entitled. Few people will
tolerate external limits on care that they
consider essential for themselves or their
loved ones if those limits are seen not as
the result of scarcity but as someone else's
refusal to spend money for readily avail-
able care. This hypothesis may explain
why many people view limits on their own
health insurance coverage, for example,
as an unfair denial of necessary care, not
as necessary rationing. If true, it will be
extremely difficult to limit either the use
of health care or the money spent on
health care as long as the supply of health
care resources is perceived to be unlim-
ited and as long as those who attempt to
impose limits can be viewed as making
hidden and self-interested decisions about
how much money to spend. In short, an
equitable distribution of health care may
be impossible without a credible scarcity
of resources.
What Resources Are Scarce
in Health Care?
Very few health care goods or ser-
vices are inherently limited by scarcity of
supply in nature. The most obvious ex-
amples are organs for transplantation. A
few pharmaceuticals and biologics are in
limited supply because they are derived
from natural elements that are themselves
rare or hard to find in nature, such as
derivatives of rain forest plants. When
synthetic chemical substitutes can be
created, the natural limit disappears. The
vast majority of drugs and devices do not
require naturally limited components,
however, and are not naturally scarce
resources. In fact, most medical technolo-
gies are not scarce. Historical examples
include iron lungs for polio (followed by
initially limited supplies of polio vaccine)
and kidney dialysis machines.12 Limita-
tions on supplies are a function of the
amount of money spent to produce
technologies. If more money is spent,
larger quantities can be (and have been)
produced.
The same is true for the people who
deliver health care services: the physi-
1440 American Journal of Public Health
cians, nurses, dentists, technicians, and
others who counsel, test, and treat pa-
tients. The United States has enough
people to deliver health care services to
everyone in the country. When we heard
about a shortage of nurses, for example, it
was not because there were not enough
people in the country to serve as nurses. It
was either because not enough people
had been trained to provide nursing
services or because not enough money
was being paid as salary to persuade
people to train or work as nurses. The raw
materials-people-exist. It is money that
turns human resources into health care
providers-money to pay for training and
the services nurses deliver-just as money
turns raw materials into products.
If there is no natural limit on health
care providers or most technologies (in-
cluding goods and services), why are
health care services so often considered
scarce resources? The obvious reason is
that there is a limit on the amount of
money people are willing to spend to
"make" and use technology and provid-
ers. In theory, we could spend 100% of
our gross domestic product on health care
services. We do not, of course, because we
could not survive without food, clothing,
and shelter, and we also want education,
police protection, vacations, and a host of
necessary or merely desirable things.
Thus, we allocate our money, devoting
only a portion to health care. If the pot of
money allocated to health care will not
buy everything we need or want, that pot
in turn is rationed among people and
services. At the level of patient care, it
looks as if health care services are being
rationed, when in fact it is the money to
buy health care services that is limited.
For example, Oregon limited the
amount of money it made available for
medical care for Medicaid recipients and
allocated that money to services for
specific conditions (diagnosis-treatment
pairs) that were ranked to indicate prior-
ity. Liver transplants for cirrhosis attribut-
able to alcoholism were originally ranked
too low to be eligible for Medicaid
payment. From the perspective of Medic-
aid beneficiaries who needed such trans-
plants, it looked as if health care was
being rationed. There was no shortage of
transplantation facilities, however, and no
unusual shortage of livers for transplanta-
tion. After protests that the ranking was
biased or unprincipled, the legislature
moved that diagnosis-treatment pair up
in the ranking so that it would be covered.
In essence, Oregon reallocated its Medic-
aid pot of money to buy more liver
transplants.
If, as economists believe, money is
merely a means of valuing capital, labor,
and raw materials, then how we allocate
our money reflects how we value different
resources. Therefore, financial limits on
specific resources are the functional
equivalent of natural limits on those
resources. Of course, natural limits im-
pose absolute scarcity, whereas the finan-
cial limits we set create artificial or
relative shortages. Nonetheless, financial
limits are inevitable. Indeed, this is the
rationale behind sensible arguments that
health care resources ought to be distrib-
uted more equitably: because we cannot
spend all (or even nearly all) of our money
on health care, health care resources are
effectively limited. Despite the truth in
such arguments, it is not clear that this
logic has been wholly embraced by con-
sumers. Indeed, it appears that the degree
to which financial limits are accepted as
functional equivalents of natural scarcity
depends on whose money is at issue.
Rationing and Allocation
Scholars of rationing tend to prefer
the concept of resource allocation to
rationing to describe how resources are
distributed.'3 Resource allocation at the
level of global decision making, called
macroallocation, is commonly distin-
guished from decisions about which indi-
viduals get what services.14 Macroalloca-
tion decisions determine how much money
is allocated to health care in this country.
Rationing, strictly construed, occurs when
a patient is (or is not) selected to receive a
treatment that is in limited supply. Bioethi-
cists and economists correctly point out
that macroallocation decisions determine
how much of a given resource ultimately is
made available to ration among individual
patients.'"
There is little disagreement among
scholars that allocation decisions are
being made every day in this country.811'16
Macroallocation decisions at the federal
and state government levels result, usually
implicitly, from decisions about how much
of the government's budget to spend on
health care programs as opposed to
defense, education, road repair, environ-
mental protection, park services, the arts,
and other social goals. The market also
serves as a mechanism for making macroal-
location decisions about private re-
sources.
Between macroallocation decisions
and rationing care to individual patients,
October 1995, Vol. 85, No. 10

thousands of organizations, primarily
health insurers, allocate their resources in
ways that affect access to care by indi-
vidual patients. Although such institu-
tional decisions are also commonly re-
ferred to as macroallocation decisions,
they are actually microallocation deci-
sions. This is because these decisions are
made at the level of the individual firm or
company (such as a health insurance
company, health maintenance organiza-
tion, or managed care network), not the
national or state level. Moreover, these
decisions allocate the firm's resources
among several uses, such as salaries,
administrative expenses, health care ser-
vices, and profit; they do not choose
specific services for individual patients.
Microallocation decisions by companies
should be distinguished both from mac-
roallocation decisions and from physi-
cians' decisions to recommend for or
against a specific treatment for an indi-
vidual patient. The amount of money
available to put in a company's health care
pot is determined largely at the macroallo-
cation level as the result of market
competition and, often, of government
decisions; a company does not engage in
national macroallocation decisions.
The allocation methods commonly
discussed for macroallocation do not
easily fit microallocation decisions. Mac-
roallocation criteria have been discussed
in terms of principles of social justice, that
is, deciding how much to allocate to
health care as opposed to other social
goods. Here, the debate often centers on
whether people are entitled to any particu-
lar level of resources or to particular
resources for specific health needs by
virtue of either an individual moral right
or a societal responsibility to provide for
the common good.8"1"7'8 Such abstrac-
tions rarely play a role in decisions by
private organizations about how to spend
their money.
Many insurers ration care to their
subscribers by approving or denying ser-
vices or payment in specific cases. But true
rationing or patient selection decisions
are not allocation decisions, even though
they may affect institutional budgets.
Rationing methods include medical need,
likelihood of medical benefit, degree of
benefit or predicted quality of life, social
and psychological resources to enhance
recovery, age, social worth, economic
productivity, vital responsibilities (favor-
ing patients on whom others depend),
maximizing the number of lives saved,
minimizing the resources used per pa-
tient, lottery or random selection, first
October 1995, Vol. 85, No. 10
come/first served, and willingness to
pay.'4 92' Because these methods focus
so specifically on which patient should
receive which treatment, they do not
capture the type of institutional resource
allocation decision that makes it neces-
sary to limit the number of patients
receiving the treatment. While rationing
decisions presume scarcity of a resource,
microallocation decisions create artificial
resource scarcity.
Perhaps microallocation decisions
have been lumped with macroallocation
decisions because they are both primarily
financial decisions (decisions about how
much money to allocate to health care).
But the reasons for such decisions, as well
as how the decisions are made, differ
significantly depending on whether the
decision maker is a government or a
private organization.
In this country, there is no single pot
of money allocated to health care. There
are many different pots that are added up
to obtain a sum called national health care
expenditures. The federal government
has several pots. It spends money to help
train physicians, to fund health care
technology research, and to pay for
Medicare and Medicaid services and
other programs like health care for the
military and veterans and family planning
services. State governments also have a
few pots of money to buy Medicaid
services, to pay for care for some of those
without health insurance, and to fund
public health programs. Private insurers,
including indemnity companies, health
maintenance organizations, and new inte-
grated service networks, each have a pot
of money (from premiums) to pay for
services for their subscribers. Employers
with self-insured employee group health
plans have their own pots of money for
health services. Most individuals have a
small pot of money to buy health insur-
ance and to pay for services that are not
covered by health insurance. About 40
million people do not have access to an
employer, insurance, or government pot
and may have too little money to buy the
health care they need.22
All governments, organizations, and
individuals with a pot are able to decide
how to spend their money. Indeed, the
configuration of health care goods and
services in the United States is a product
of a multitude of decisions about how
much to spend on research, administra-
tion, salaries, profit, and delivery of spe-
cific health care goods and services. This
is the way in which money is allocated for
health care in the United States. How the
Health Law and Ethics
money is spent determines what health
care is available to whom.
The federal government and state
and local governments are responsible for
about 43% of personal health care expen-
ditures ($337 billion in 1993).23 The
balance of personal health expenditures
($445.5 billion in 1993) includes payments
by private health insurers, self-insured
employers, and individual patients.23 The
fact that such a large proportion of health
expenditures represents private decisions
means that there is no preimposed na-
tional limit on how much money will be
spent for health care. Even if govemment
imposes limits on its own health care pots,
it does not limit all of the money in the
country that can or will be spent for health
care. Without any overall budgetary limit
at the macroallocation level, patients may
perceive health care funding and, there-
fore, health care resources as unlimited.
A private health insurance plan may
view its own budget as fixed and, there-
fore, the resources it can provide as
scarce. Yet its subscribers may not see it
this way. A health plan can increase its
budget or reallocate its funds, reducing
overhead to provide more direct patient
services, for example. The budgets of
private health plans are not subject to
limits at the macroallocation level (except
indirectly, to the degree that market
competition constrains premium prices).
Most of their funds are derived from
premiums sold in the insurance market,
primarily on the basis of price. This means
that private health insurance is rationed
by price to those willing to pay. Of course,
willingness to pay is, in part, a function of
ability to pay.
If the amount of money allocated to
health care is substantially determined by
private market decisions, there does not
appear to be any justification for ration-
ing. After all, the amount of money in any
single health care pot can be increased or
decreased at any time. Thus, the health
care resources available to patients are
not fixed or scarce but can be increased or
decreased. In a market system, limits on
the amount of money spent for health
care can be or appear arbitrary or unfair.
Many Americans do not believe that
the market is a fair way to distribute many
health care services. Ethicists, philoso-
phers, and economists have long argued
about whether any or all health care
services ought to be considered special
(necessities of life to which all individuals
are entitled) or whether they are merely
economic goods (to which no moral
entitlement attaches) that can be distrib-
American Journal of Public Health 1441
Health Law and Ethics
uted through the market.'11724,25 In spite
of lucid arguments on all sides and the
absence of any general legal right to
health care, however, polls report that a
majority of Americans favor increasing
health insurance to cover the uninsured,
primarily because everyone should be
entitled to basic or essential health care
services, variously defined.26 For many,
the market may be an acceptable alloca-
tion mechanism for things like cosmetic
surgery and private hospital rooms but not
for emergency care, immunizations, and
life-saving surgery and drugs. The latter
types of services are considered important
enough that they ought to be distributed
equitably, which usually means according
to medical need and without regard to
ability to pay.11 However, because market
purchases of health insurance and ser-
vices do not adhere to any ethical prin-
ciple of resource allocation, the market
cannot achieve a particular desired distri-
bution of essential health care services.
This may leave people with the sense that
limitations on health care are the result of
unfair price rationing that deprives people
of essential care without justification.
Rationing by Insurers
The demise of federal health care
reform has left most decisions about how
to spend money for patient care in the
hands of the private sector. Even govern-
ment programs like Medicare and Medic-
aid are beginning to shift their beneficia-
ries into private managed care plans,
partly to improve patient care but primar-
ily to save money.27 Government has
determined that it cannot afford to put
much more money in its health care pots
and hopes to make more efficient use of
what it has by enrolling Medicare and
Medicaid beneficiaries in private man-
aged care plans. This delegates to private
companies the power to make decisions
about how to spend government funds
(paid to insurers as premiums) for their
beneficiaries. There are some federal or
state guidelines on what the money
should be spent for, but increasingly
private companies will decide what spe-
cific types of care individual patients
receive.
Ideally, in an increasingly competi-
tive health care market, health plans will
use their money wisely and flexibly to suit
their patient populations and control
costs. However, most knowledgeable ana-
lysts doubt that strategies such as man-
aged care and improved prevention pro-
grams will succeed in reducing spending
1442 American Journal of Public Health
enough to avoid more limitations on care
in the long run.28 30 Because each organi-
zation is free to make its own decisions
about how to spend its money, it can apply
its own criteria to ration health care
services among those who depend on it
for care.
What criteria do private insurers and
employers use to allocate their money
and, in turn, ration health care services to
patients? Little is known because such
decisions are private. There is, however,
some evidence that different insurers
already make inconsistent decisions about
providing care. The US General Account-
ing Office studied the decisions of six
insurance carriers who administered Medi-
care Part B reimbursement claims for 74
costly or frequently used procedures in
1992 and 1993 and found a significant
degree of inconsistency in the rates at
which the carriers denied claims based on
lack of medical necessity.31 For example,
for every 1000 angioplasty procedures
approved, one carrier denied 182 claims,
another denied 29, and another denied
none. The primary explanation for this
variation was whether and how the carri-
ers screened for medical necessity.32 Other
factors included the carriers' different
interpretations of what was covered by
Medicare. If there is this much inconsis-
tency in the way in which private insurers
carry out the same statutory program, it
would not be surprising if private insurers
differ even more substantially in the way
in which they carry out their own indi-
vidual health plans.
In the absence of any consensus on
what criteria to use for rationing, there is
bound to be inconsistency and unfairness
in rationing. Everyone with a pot of
money for health care may use different
criteria for rationing. Where the criteria
are private and not subject to public
scrutiny, patients may mistrust those who
make rationing decisions. They may fear
they are being denied care so that the
money can be used to profit the organiza-
tion. For example, after complaints that
women giving birth were being rushed out
of the hospital 12 to 24 hours after
delivery by managed care plans, Maryland
passed legislation requiring a minimum
48-hour hospital maternity stay, and New
Jersey and Massachusetts are considering
similar legislation.33 Reports that the 16
largest for-profit health maintenance orga-
nizations have enjoyed an average in-
crease in profits of 40% since 1993 may
fuel fears that patients may be denied
treatment in order to reward corporate
executives with large salaries and bo-
nuses.34,35
Vitalism and Mistrust
of Rationing
Another reason for public mistrust of
rationing is the peculiarly American belief
in a form of vitalism: the idea that a long
and healthy life is especially desirable and
that each individual is morally entitled to
live as long as possible and to be as
healthy as possible.36 George Annas has
described this as the belief that death is
optional.37 Rene Dubos and Daniel Calla-
han have critiqued the American fascina-
tion with health, noting that there is no
inherent limit on our desire for health.38'39
This vitalism encourages the notion
that everything that can be done ought to
be done to keep people alive as long as
possible, regardless of cost. And a great
deal is possible. Medical technology can
keep people alive, if not always conscious,
for a very long time. Without any signifi-
cant external limitation on its availability,
life-prolonging care can be used as long as
patients desire it. Some patients have
begun to set limits on care that merely
prolongs the dying process.40 Others have
become so wary of aggressive medicine at
the end of life that they have called for
legislation to permit physicians to help
them commit suicide.41 But these seem to
be exceptions that prove the general rule
that most Americans want access to most
medical services. Even if they wish to
refuse a certain kind of care, patients still
want it offered to them. They want to be
the ones to reject it. Patients who are sick
typically want whatever treatment their
physicians recommend (and often get it),
regardless of whether their health insur-
ance policy covers it.42'43 If necessary, they
hold bake sales to raise money to pay out
of pocket for the treatment. Thus, the
only boundary to the use of health care is
patient demand, which itself may be
almost unlimited.
If this is a correct, albeit simplified,
depiction of American attitudes toward
health care, it reinforces public resistance
to externally imposed limits on care. For
example, when the media report that a
woman is dying of advanced breast cancer
and her insurer will not pay for high dose
chemotherapy and autologous bone mar-
row transplantation because it considers
the procedure experimental or unsuitable
for her, the insurer is widely viewed as
depriving the woman of a chance at life to
which she is entitled. Insurers may argue
that the insurance policy expressly ex-
October 1995, Vol. 85, No. 10

cludes such procedures and that the
woman agreed to its limits.44 Such argu-
ments, even when correct, do little to
assuage feelings that the insurer is depriv-
ing people of care to which they should be
entitled. This feeling is exacerbated by the
suspicion that the insurer could pay for
the treatment if it chose, that it has
enough money to buy services that are
readily available. Thus, what looks to the
insurer as sensible budgeting may appear
to the patient as unnecessary and unfair
rationing.
Private insurers may attempt to allo-
cate their money to provide the most
cost-effective or cost-beneficial care to
their insured population as a whole.
When statistical lives are considered,
cost-benefit analysis makes sense. Con-
sider congressional proposals this year to
require federal environmental and con-
sumer protection agencies to demonstrate
that the benefits (in terms of years of life
saved) of their regulations exceed their
costs. There is little doubt that safety
regulations have saved thousands of lives
and that many people would die if those
regulations were repealed on the grounds
that the cost per life saved is too expen-
sive. This is a way of rationing preventive
services on the basis of cost. We are less
rational when individual, identified lives
are at stake.44 People who show no
interest in mining safety precautions offer
enormous support (and funding) to res-
cue a single child trapped in a mine, even
though making the mines safer could
prevent many more deaths at far less cost
per life saved.
The same disparity in public empa-
thy for individuals in danger and faceless
groups is evident in health care. Many
people recognize that it makes more
economic sense to immunize children
against infectious diseases than to pay for
a liver transplant in a very elderly patient
whose cancer has metastasized to the
lungs. Yet, when the patient is your father
or mother or husband or wife-or you-
rational cost-benefit analysis rarely con-
trols the decision. Few people are willing
to place a dollar limitation on their own
lives or the lives of their loved ones. Most
people feel entitled to at least be offered
the transplant, even if they choose to
reject it.
The desire to save identified lives and
the belief that health and longevity are
supremely valuable reinforce each other.
When combined with the intuition that
health care resources and the money to
buy them are readily available, they may
explain why individuals resist limitations
October 1995, Vol. 85, No. 10
on health care, even if they might agree
that health care resources are not being
used efficiently. People may view financial
limits on health care-limits imposed by
health plans that refuse to pay for existing
technology-as suspect. Patients are sub-
jected to rationing, but they know that the
technology is not scarce. Rather, some-
one, usually an insurer, is refusing to pay
for something they (and their physicians)
believe they are entitled to have (but
cannot afford) in order to save money.
Moreover, the patients will not necessar-
ily receive the benefit of the money saved.
There is no guarantee that the money
saved from not paying for the transplant
will be used to pay for children's immuni-
zations, for example. The public also
knows that any patient who raises the
money to pay for it can have the trans-
plant. So, if people believe that they
should live as long as possible, that there
are health care services that will enable
them to do so, and that the only thing that
stands between them and a long, healthy
life is money, and they believe that their
health plan (or government) is placing
artificial limits on the money it is willing to
spend, they are not likely to accept
rationing of health care services.
Raioning by Limiting Supply
It is possible that Americans could
change their attitudes about the value of
health and health care and eventually
accept the idea that longevity should not
be the ultimate goal of human existence,
that some goals are more important than
personal health. Callahan, for example,
has argued that society must change the
way it views health because the country
cannot afford to meet an infinite demand
for health care.A8 Public recognition of the
costs-both human and economic-of
health care may ultimately produce such a
change. But this change is likely to take
several generations, if it occurs at all. In
the meantime, the costs of health care
continue to consume an increasing propor-
tion of the gross domestic product. The
country cannot afford to wait for a change
in personal values if it intends to invest in
goods like education and defense in
addition to health care. More immediate
action is needed.
It is possible that well-managed
health care plans can weed out some of
the waste in the health care system and
use resources more efficiently. But, as
Henry Aaron and William Schwartz have
argued, it is unrealistic to expect such
measures to save enough money to keep
Health Law and Ethics
national health care expenditures from
rising to unacceptable levels.46 New tech-
nologies can save some money, but most
do not. Many new technologies are used
in addition to existing technology (e.g., to
reduce diagnostic uncertainty) and serve
to increase costs. Other technologies are
only marginally more beneficial than
existing technology, yet cost more. In the
absence of any natural limit to either
health care resources or our desire to use
them, efficient management may slow but
not stop the overall long-term increase in
spending. Thus, more and more money
will have to be put into all of the health
care pots or the money in the pots will
have to be rationed more restrictively. As
each group makes its own decisions about
how to spend its health care money pot,
many decisions appear arbitrary and
unfair.
There is little doubt that access to
some kinds of health care will have to be
restricted more in the future unless health
care spending is brought under control.
Indeed, most commentators believe that
health care rationing is either already
here or inevitable.10'11'29'3047 For this rea-
son, many argue for open and explicit
criteria for allocating health care re-
sources or rationing, especially to avoid
unethical allocation that can result from
hidden or implicit decisions.4749 Yet it
may be impossible to reach agreement on
criteria for rationing if the need for
rationing itself is not credible. It is
unlikely that people will accept the need
for rationing their own care without
seeing unmistakable scarcity in health
care resources, scarcity that they find
credible because it is real.
As Daniels has noted, physicians find
rationing decisions difficult-and both
physicians and patients may perceive
them as unfair-because they cannot
point to a just macroallocation scheme
that justifies denying care to patients.50
Current health care financing mecha-
nisms do not result in a just allocation of
resources at the macroallocation or micro-
allocation level. And no allocation criteria
are likely to be accepted unless there is
credible scarcity at both levels.
There is really only one way to limit
the use of resources, and that is by limiting
the supply of those resources. The only
way to prevent the use of health care
resources is to not have them available. If
resources are physically available, both
physicians and patients will insist on using
them. Telling physicians or patients that
using existing resources is not cost-
beneficial or even cost-effective will not be
American Journal of Public Health 1443
Health Law and Ethics
convincing most of the time. People will
not tolerate rationing unless they are
persuaded that the thing being rationed is
scarce. If there is only one organ available
for transplant, people can accept the fact
that it goes to another patient who needs
it more urgently, because it is a scarce
resource that is rationed fairly. However,
if a patient's health plan refuses to pay for
an expensive drug like tissue plasminogen
activator (tPA), the patient is not likely to
believe he or she has been treated fairly.
The patient knows that other patients
who belong to a more generous health
plan or who can raise the money to buy
tPA will get it; the drug is not naturally
scarce, and it is not allocated according to
need. Thus, if health care services are to
be rationed, they must be made scarce.
Then it may be possible to apply ethical
criteria for allocating scarce resources in
an equitable manner.
Making health care services scarce
means limiting their supply at the level of
macroallocation. In the absence of limits
on overall supply, limits at the microalloca-
tion level are not likely to be credible.
People may perceive a health plan's
coverage and payment decisions as artifi-
cially depriving them of necessary services
that the plan could make available if it
chose, and they may demand that the plan
provide more care. To be credible, the
supply available to health plans must itself
be limited, not by self-imposed plan
budgets but by the absence of resources.
The more complicated question of
how supply might be limited and fairly
allocated-as by direct regulatory con-
trols on health care resources or global
budgeting at the national or state level-
must be deferred to a later time. The
purpose of this article is merely to present
the argument that such limits are an
essential prerequisite to public accep-
tance of the need to ration health care
resources equitably. If this hypothesis is
true, then limiting the supply of health
care resources may persuade or force
people to set equitable national limits that
recognize the relative importance of health
in comparison with education, housing,
and other valuable social investments and
even to reduce health care spending by
abiding by such limits. Then perhaps we
can get to the important work of creating
methods for the equitable distribution of
these resources. Limiting supply at the
macroallocation level is only the first step
of a four-step process toward equitable
distribution of health care. The next two
steps are to allocate national health care
resources among health plans (or groups
1444 American Journal of Public Health
of patients) in an equitable manner, and
to ensure that health plans allocate their
own resources so as to provide fair and
adequate health care to their participants.
The final step is to implement equitable
criteria for rationing (in the strict sense of
patient selection) health care among
individual patients.
Conclusion
Americans can't say no to health
care. Despite persuasive arguments that
rationing is not only inevitable but being
practiced in this country and general
acceptance of the need to control health
care costs, Americans refuse to accept
limitations on their own health care. Two
peculiarly American attributes may ac-
count for this apparent contradiction. The
first is the health care system, with its
complex array of public and private health
insurance financing mechanisms that do
not limit the total health care resources
generally available. In the absence of any
global limitation on health care resources,
patients may perceive that such resources
are not scarce and, therefore, not in need
of rationing. The second attribute is the
belief that everyone is entitled to a long
life of unlimited good health. Even if
people recognize that some health care
money is wasted and that some services
are too expensive, they can still believe
that there is no natural limit on the health
care to which they are entitled.
In such circumstances, why should
anyone accept rationing? The rationing
that does occur in public and private
insurance coverage and payment deci-
sions appears to be unprincipled and
unjust, consisting of denials of care to save
money for someone other than the pa-
tient. Apart from mandated benefits,
private insurers are free to set their own
policies about what care they pay for, so
patients who are refused coverage have
no assurance that their sacrifices serve any
noble purpose or are even necessary. This
is not to suggest that patients are to blame
for the inequities in access to health care.
On the contrary, patients may be respond-
ing quite rationally to the uneven distribu-
tion of care in this country. It is hard to
argue that any individual patient should
sacrifice his own medical care for the good
of society when the same is not expected
of everyone else.
It is unlikely that Americans will
come to any consensus about how to
reduce health care expenditures or allo-
cate health care resources fairly if they are
not faced with a shortage of resources. A
just distribution of health care resources is
not likely to be pursued until there is
scarcity in health care. Today's ad hoc
limits on the amount of money in the
multitude of health care pots do not
create credible scarcity. Real scarcity may
be necessary before Americans are willing
to say no. El
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