Healthcare Rationing or Simply Prioritization?

An interesting paper by Roland Turck (doi:10.1093/annonc/mdw548) puts oncology drug pricing into a certain perspective. For me, the most perceptive remark is that while oncology drugs represent only about 1% of total healthcare costs, administration accounts for some 30% of total US healthcare costs. He also cites a reference that “it is estimated that new treatments and drugs contribute 83% to increased life expectancy in cancer patients” but he recognises that “as long as new drugs meaningfully improve patients’ outcomes, costs will continue to increase and so will the pressure to manage them.”

Where I part company with Dr Turck, and I suspect with a very large number of Americans, is over his views of Europe. He claims “Europeans…have long had to accept rationing and governments capping the price paid for a year of life gained” whilst “US Americans have much freer access, provided they have healthcare coverage”. He believes that Europeans find healthcare inequality anathema whilst Americans believe that attaching a monetary value to life is toxic. So Americans believe in free markets and the inalienable right to healthcare whereas Europeans ‘level down’ healthcare lest anyone should gain unfair advantage.

Why do I disagree? At the simplest level, because the facts don’t fit: Europeans are absolutely free to buy US-style private health insurance to either top up or even supplant the publicly-provided healthcare. No-one is denied access, other than for reasons of wealth (or rather, lack of it). Were private healthcare illegal in Europe, he may have a point – but it’s not, there are fee-for-service physicians and hospitals throughout Europe, anyone with funding can access them, rationing-free, just like the USA. The interesting thing is how low the demand for private health is in the UK vs. international comparators. Overall private spending/GDP is lower in the UK (c. 2% of GDP) than almost every other country in the OECD. Co-pay within the public sector is practically non-existent and private healthcare (whether insured or self-pay) covers only 11 million of 65 million population (and most of that is far from comprehensive cover). So at least in the UK, there does not seem to be any sign of popular clamour for ‘non-rationed’ healthcare.

But at a more subtle level, there is dissembling about the terminology: ‘rationing’ means a system of limiting the amount of something that each person is allowed to have. That is absolutely not the objective of European healthcare systems. Take the scenario I know best, the UK’s NHS; it is funded by taxation and has a finite budget. For the sake of argument, ignore the possibility of budget overruns (as these are short term distortions at best). In this scenario, the budget managers have an absolutely fixed amount of funding that needs to be disbursed. Perhaps they could spend it on a strictly ‘first come, first served’ basis until the annual budget ran out. That might remove some of what Americans find objectionable to the European approach as it wouldn’t discriminate against the big ticket items. But instead, what the NHS, via NICE, tries to do is to target its budget into the most cost-effective interventions. The argument is that if they spend on X, they don’t have the funds available to spend on Y, so X had better be more cost effective than Y else it would be unfair on the people suffering with Y. It’s not so much rationing as prioritization – the money goes to the most cost effective therapies; to do otherwise would be to deny others of therapies that are more cost effective.

What’s anathema to Europeans is not the thought of inequity in healthcare, it’s the prospect of an unlimited healthcare bill.

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