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Same Rationing, Different Name

March 13, 2015

One of the key features of government-run health care is rationing through politics, whereby elected officials and unelected bureacurats get to decide, indirectly at least, how much health care people can have and when they can obtain it.

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One of the key features of government-run health care is rationing through politics, whereby elected officials and unelected bureacurats get to decide, indirectly at least, how much health care people can have and when they can obtain it. Although it goes by different names, one of the key features of such systems is the 'global budget,' wherein the state says they will spend $X and no more on health care in any given budget period. That $X is further broken down into smaller amounts, of course, so .13 of X might be allocated to cancer treatment, .02 to emergency room care, and so forth. When the money's out, no more health care.

Government isn't alone in adopting this approach however. Health Maintenance Organizations (HMOs) operate on a similar basis - doctors are given a set amount of money per patient, and those funds are aggregated with money from all the other patients covered under a similar arrangement. The doctor's job is to manage the money carefully to ensure it doesn't run out (in which case further care may have to be paid for out of their own pocket), and in fact benefit by being able to keep left-over money if the cost of all the patients' treatments don't exceed the global budget amount.

One terrific way to ensure there's left-over money, of course, is to limit access to care.

Terrific, of course, unless you're the patient.

There has been a fairly easy way to avoid this sort of rationing, of course - don't buy an HMO plan. In order to ensure better access to care many people instead buy Preferred Provider Plans, somewhat more expensive (although usually not that much), which typically allow better access to care because doctors don't look at patients as costs, but as revenue (if we're just breaking things down financially).

Blue Cross and Blue Shield of Massachusetts is apparently looking to change this dynamic, according to a story in Modern Healthcare. The story explains that "Blue Cross and Blue Shield of Massachusetts wants to expand its use of global budgets outside of managed care... The company plans to introduce global budgets in its preferred provider organization health plans..."

As the Obama administration and others try to wrestle more of the health care system into the 'Politicians know best' model of central planning, including the current mania for 'payment reform,' I expect to see a lot more of this sort of thing, essentially trying to create a system that isn't true single-payer, but has all the worst features of it such as global budgets and long waits for care.

The only way I see out is to do what I've done, which is become a self-pay patient and opt out of third-party payment altogether.

Article Tags
Health Care
Author
Sean Parnell (sparnell@heartland.org) is a research fellow for health policy at The Heartland Institute.
sparnell@heartland.org @seandparnell