Chapter 9: Distributing Health Care

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: • 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 likelyto 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. TristramEngelhardt, 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 rightto 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 CarePresident’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 CarePresident’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 FinitudeH. TristramEngelhardt, 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 FinitudeH. TristramEngelhardt, Jr. • To attempt to impose a remedy in the form of an all-encompassing, 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 SystemKai 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 three-tier systems are unjustified.

Autonomy, Equality and a Just Health Care SystemKai 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 CareNorman 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.

Chapter 9: Distributing Health Care