Making Medical Spending Decisions

One of the most fundamental issues in health care delivery is who should decide which items of medical care are not worth their cost. This book is a fresh and comprehensive exploration of how health care rationing decisions are made. Unlike prior works, its focus is not on the specific criteria for rationing, like age or quality of life. Instead, the author provides comparative analysis of alternative social mechanisms for making medical spending decisions: (1) consumers paying for their medical treatment out of pocket; (2) payers, government officials, or other centralized authorities setting limits on what doctors can do and what insurance will pay for; and (3) physicians motivated to make these decisions at the bedside level. His analysis of each of these mechanisms reveals that none is uniformly superior, and each is better suited for certain decisions that others. Therefore, a mix of all three is inevitable. The author develops his analysis along three dimensions: political economics, ethics, and law. The political economic dimension discusses the practical and theoretical aspects of each method for making spending decisions, synthesizing empirical studies of the situations in which each mechanism has been tested. The ethical dimension is based on several strands of philosophical theory, principally classic liberalism, social contract theory, and communitarianism, as well as conceptual analysis of terms such as autonomy and coercion. The legal dimension addresses recent developments in legal doctrine such as informed consent, insurance coverage disputes, and the emerging direction of federal regulation. Hall concludes that physician rationing at the bedside is far more promising than medical ethicists and the medical profession have traditionally allowed. The best way to allocate authority for making medical spending decisions in both public and private systems, he believes, is the informed purchase of different types of health insurance in a managed competition framework.