Rational on Rationing

David Leonhardt has an important column in The New York Times this morning looking at how the “rationing” buzzword is misused as a health care buzzword.

This is clear-eyed, calm reasoning—a gentle but firm rejoinder to the spin from opponents of serious reform. It’s critical that the press do this kind of work because the debate about to commence is perhaps the most important we’ll have in years. We need to have it on the merits.

The r-word has become a rejoinder to anyone who says that this country must reduce its runaway health spending, especially anyone who favors cutting back on treatments that don’t have scientific evidence behind them…

In truth, rationing is an inescapable part of economic life. It is the process of allocating scarce resources. Even in the United States, the richest society in human history, we are constantly rationing. We ration spots in good public high schools. We ration lakefront homes. We ration the best cuts of steak and wild-caught salmon.

The critical point here is that rationing is already in place. Health care costs take up about one-fifth of GDP as it stands. If everyone had a CAT scan every few months, we could surely catch cancers earlier, but we’d add a few points to that GDP number.

As Leonhardt says:

The choice isn’t between rationing and not rationing. It’s between rationing well and rationing badly. Given that the United States devotes far more of its economy to health care than other rich countries, and gets worse results by many measures, it’s hard to argue that we are now rationing very rationally.

Leonhardt lists some major ways we ration health care: By not giving certain types of care; by trading wage increases for the increased costs of coverage; and, oh yeah, by not insuring a vast swath of the country:

The uninsured still receive some health care, obviously. But they get less care, and worse care, than they need. The Institute of Medicine has estimated that 18,000 people died in 2000 because they lacked insurance. By 2006, the number had risen to 22,000, according to the Urban Institute.

Extrapolate that out and it’s equivalent the entire population of Salt Lake City being wiped out since 2000.

Rationing, indeed.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.