How the US Health Care System Rations

Anyone who doesn't think the US health care system involves rationing, read this story.

Fifty-three year old Delbert Davis recently died of complications from cirrhosis of the liver that was diagnosed two years ago.

Just prior to the diagnosis, Davis lost his health insurance coverage after being laid off from a printing company in Austin, TX. His wife – who he just married a year earlier – was an adjunct history instructor at Austin Community College, but she wasn’t able to qualify for the health insurance plan there until she worked in the system for three years.

The health care bills quickly racked up as Davis’ condition got worse. After a year, doctors determined that Davis needed a liver transplant. If he didn’t get one, they said, he’d be dead in a year.

According to state records, about 1,380 Texans are currently on the waiting list for a new liver. Last year, 143 people on the list died while waiting. This is an issue of new organ scarcity. And until medical advances like embryonic stem cell research progress much further, it's an issue we're forced to accept.

But since Davis didn’t have health insurance, he couldn’t even get on the transplant list. He never even had a shot at getting healthy. That's a fixable problem -- and one that we don't need to wait to fix.

According to a spokesperson from a hospital that Davis contacted about getting on the list: "We can't [put Davis on the list]. Safety net hospitals are forced to make very tough decisions. We wish we could provide every medical service, but it would be fiscally disastrous for us to do that."

Even when Davis and his wife took positions that were supposed to offer health insurance, they couldn’t get coverage because of his pre-existing condition. As Davis’ doctor, Stephen Utts, noted, “What insurance company is going to insure someone staring down a half-million-dollar bill?”

Davis appealed to his representative in Congress, Lamar Smith, who helped get him authorized for $1200 per month disability payment from Social Security, and it also made him eligible for Medicare…but not for two years.

Davis’ wife summarized the situation: “My husband and I have worked hard all of our lives. We had insurance up to a very brief window of time: three months that we didn't have coverage, and this happened. Just that little lapse of time . . . and we were trapped in a spiral that we couldn't get out of.”

And for those who think this is an isolated incident, according to Dr. Utts: “There's a disdain for universal coverage, and it's tragic. In 20 years of practice, I've probably seen hundreds of patients” die because they couldn't get on the transplant list without health insurance.

This is the US health care system's version of rationing. As health policy expert Matthew Holt has explained: "So yup [rationing] happens here too, and instead of doing it by some defensible way — like looking at the cost-benefit analysis for a population — that an economist ought to commend, we do it on the basis of whether or not you can afford it."

And, as the case of Delbert Davis makes clear, it's not just the poor who can't afford it these days.

UPDATE: The LA Times has an article today on the new-found willingness of the insurance industry to move toward universal healthcare now that the Dems have made a resurgence in Congress.

Unfortunately, though not surprisingly, the plan introduced by the insurance lobby does nothing to hold down health care costs, either by reducing administrative overhead or pooling payers in the system to achieve better negotiation discounts. And why would it? After all, all of that administrative overhead is currently going into the pockets of the insurance industry along with the benefits of having a variety of payers in the system.

Another interesting note from the LA Times article, while the Dems are aiming at health care reform on the national level, they plan to do so cautiously. An insider source says they'll operate around the edges over the next two years but really not take reform head on until after 2008...assuming, I imagine, that election goes in their favor as did last Tuesday's.

That doesn't mean, however, Wisconsin (or even just Milwaukee County) needs to wait with them.

LATE UPDATE: Matthew Holt's take on the insurance industry's plan. Color him skeptical.