Pathways to Healing

by Elaine Zablocki

How the

US Rations Health

Care

The US health-care system allocates medical services in a haphazard way, based on income, age, race, region, employment status, and many other factors, according to Beatrix Hoffman, professor and chair of the Department of History at Northern Illinois University in DeKalb, Illinois. “This has created a disorganized, illogical, and powerful form of rationing,” she says. “Unlike rationing in most countries, which is intended to keep costs down, rationing in the United States has actually led to increased costs, resulting in the most expensive health-care system in the world.”

Her latest book, Health Care For Some: Rights and Rationing in the United States Since 1930,

is a detailed, thoughtful history of health care in the US from the Great Depression until today. She is the author or editor of two previous books on health care, Patients as Policy Actors and The Wages of Sickness.

Debates about health care in the US often focus on the most notable achievements of high-tech medicine, and quite a few people believe that health-care rationing is something that only happens in other countries. Hoffman’s book makes us pause and think about forms of rationing that are so familiar, we don’t even see them.

“Most Americans experience health-care rationing by employment,” Hoffman observes. “We are the only developed nation that depends on an employment-based health insurance system. People who lose jobs, or change jobs, or get sick and cannot continue working, tend to lose their coverage.”

Employment-based systems used to be quite common, starting at the end of the 19th century, Hoffman says. But after World War II, Western Europe, Canada, and other advanced countries decided it made more sense to move toward universal health coverage, no longer based on employment status. “In the United States at that time it was in the interests of both some labor unions and employers to have employment-based insurance coverage, because it was a way for businesses to attract and keep workers during a period of labor shortages,” Hoffman says.

“It was seen as an immediate benefit to both workers and employers, and then it became an entrenched benefit.”

Limited health insurance coverage has been available in the US starting in the 1920s. “Blue Cross was created in1929, but as nonprofit hospital coverage,” Hoffman says. “During the early 1940s the insurance industry began providing employer-based insurance, and this became a hugely profitable, growing market. So the insurance industry also worked against changing the employer-based system, once it was established.”

Rationing Care by Health Condition

Another very common form of rationing is by health condition. “People with chronic illnesses or other preexisting conditions have a much harder time of getting health insurance,” Hoffman says. “Our system is designed so that health insurance companies look for healthy people because they are cheaper to cover, and we end up with rationing by health condition.”

The Affordable Care Act means the beginning of the end for rationing by health condition. “There is a long road ahead. Unfortunately, we can’t say that this kind of rationing will vanish. But in January 2014, insurance companies will no longer be allowed to exclude people based on preexisting conditions,” Hoffman says. “That is a very big change.” The reform prevents insurance companies from refusing to sell coverage or renew policies because of an individual’s preexisting conditions.

While various steps within ObamaCare will lead to less-rationed health care, it will not create a level playing field, Hoffman emphasizes. Under the new system, a moderate-income worker whose employer doesn’t offer insurance will receive subsidies to purchase individual insurance in one of the new health exchanges. Depending on each person’s income and the amount of subsidy, some will be able to afford insurance, while some will not. The lowest-cost insurance plans will offer limited coverage with higher deductibles and copayments.

Each person’s experience will also depend on where they live, since some states will offer more options than others. “These are forms of rationing coverage by income and by location,” Hoffman says. “ObamaCare is a huge step, but it is not universal coverage. There still will be people who fall through the cracks.”

Unintended Consequences Lead to Higher Costs

The unintended consequences of our current system lead to increased costs, Hoffman says.

Private insurance companies play a major role in the system, with significant administrative costs. “Right now our system spends so much money on dividing people into different categories of eligibility, ‘Are you eligible for this test or not?’” she says. “The costs of setting up and managing inequality add to the overall cost of our system. Administrative costs and insurance company profits are an important percentage of medical costs in this country, much higher than in other countries.” She emphasizes that a less fragmented system would lead to increased coordination of care and better communication between providers. “Health policy experts say this will improve the quality of care while also reducing costs.”

How will the current changes in health care affect practitioners of complementary medicine, and those who want to use more natural forms of health care? “My book is focused primarily on conventional medical care and who has a right to it and who doesn’t, but of course it is also important to think about health care more broadly,” Hoffman says. “Various forms of preventive care are emphasized in the Affordable Care Act, with the hope that they’ll bring down costs and also improve quality of life. I hope that with so much reform going on right now, alternative types of medicine will also be considered as cost-efficient ways to enhance the quality of life.”

Resources

Hoffman’s website: www.beatrixhoffman.com.

Health Care For Some: Rights and Rationing in the United States Since 1930. University of Chicago Press; 2012.

For more information on the implementation of the Affordable Care Act, go to

http://www.healthcare.gov/law/timeline/full.html#2014.

Additional tabs on this website have valuable information about various aspects of ObamaCare.