Managing the gap between demand and publicly
affordable health care in an ethical way
JOHN A. 0VRETVEIT •
A major hearth policy challenge of the 1990s is to manage the gap between the demand for health care and our
ability to pay for care and to do so in an ethical way. This paper describes European responses to the gap, which
have been to do nothing, to do more with the same or less resources, to do more with more resources, to change
behaviour and attitudes and to define health needs more narrowly. These responses have not reduced the gap and
cannot prevent it from widening in the future. Rationing and prioritizing are other responses, which will have an
increasingly important role. This paper proposes that the survival of public hearth care systems depends on
recognizing and 'managing' the gaps and doing so in an ethical way. Conventional responses have ethical problems
equal to or more serious than those involved in rationing and prioritizing. The paper proposes that rationing and
prioritizing must become more central methods for managing the gap between resources and demand in the future,
but that such approaches will need to be more explicit and ethical if they are to gain public support.
Key words: ethics, rationing, prioritizing, health policy, needs
I
t is ironic that at a time in history when people in the
Western world have never been healthier, there is a
growing perception that their health needs are not being
met. Politicians are aware that the gap between the demand for healdi care and supply is widening at an increasing rate. Professions and the health care industry are quick
to remind politicians and the public diat diere is an even
greater gap between demand and potential supply. This
paper describes responses to the gaps and proposes that
public health care systems must explicitly manage the
gaps in an ethical way if they are to survive. The paper
first considers the nature and causes of the gaps, dien
considers different categories of responses and their ethical status and finishes by discussing further approaches to
rationing and prioritizing.
THE GAPS
Gaps between demand and affordable health care exist at
the level of the individual, the local population and the
nation and in both private and public systems. In predominantly private health systems, individuals and employers
are paying more for basic health cover and even wealthy
patients cannot afford the health care which is now
possible. At the level of die local population, both public
authorities and private purchasers are facing more and
competing claims on their finances. There is not just an
increasing range of treatments, equipment and pharmaceuticals available for direct care, but new approaches to
health promotion, education and other services as well as
Paper presented at the European Healthcare Management Association
Annual Conference, 1994
Correspondence: Dr iohn A. Ovretvett, Professor of Health Policy and
Management. The Nordk School of Public Health. Box 12133,
S-40242 Gothenburg, Sweden, tel. +46 31 693923. fax +46 31 691777
rising patient expectations and demands. At die national
level, the healdi care sector accounts for a sizeable proportion of total national expenditure. Widi current
health expenditure at over 13% of GDP in die USA and
predicted to rise to 20% by 2000, even proponents of free
choice and private healrJi care recognize drat current
consumption and costs are damaging diat nation's international competitive position. This is vividly expressed
in the healdi insurance costs paid by US auto-makers:
$865 of the total cost of a basic US Ford in 1993.
There is bodi an increasing need for healdi care and an
increasing demand. More older people are living longer
and more people are suffering from chronic, degenerative
diseases. The gap exists and grows in developed nations
because of changes in bodi die demand for and supply of
healdi care. One indicator of diis is die amount of increased hospital activity over die last 15 years. On die
demand side, people have higher expectations: since die
Second World War, standards of living and the quality of
life have risen and people generally expect more out of
life. We are more conscious of poor healdi and are less
willing to suffer even die minor discomforts which our
parents ignored. People have paid large amounts in tax or
insurance payments over many years, and expect a service
when diey feel diat diey need it. People have also come
to expect higher levels of service as a result of die 'service
revolution' in die commercial sector. In Europe, die rise
of consumerism, individualism and die 'contract culture'
in die 1980s has resulted in higher expectations being
articulated more often, bodi individually and collectively
and arights-basedattitude to healdi care.
To some extent bodi demand and need have increased
because of changes in die supply side. Perceptions of
healdi needs have changed, in part fuelled by professions
and companies seeking new markets. Medical research
Health policy and ethics
has discovered and defined diseases and needs of which
ediical rationing and prioritizing and better management
most people were not aware. The media produces an
of the gaps may restore confidence in public systems and
immediate new demand before new technologies and
slow die drift to private health care.
treatments are tested. Across Europe more health care
workers are being trained and seeking work and they and ETHICS
health care organizations are using modern marketing and
Where there has been recognition of the gaps between
publicity techniques to generate demand. All over Europe
the affordable and possible and between demand and
die extra cost of increased health provision activity outresources, die solutions proposed have been primarily
paces the savings from greater efficiency: more is being
from an economic or technical policy perspective. The
done and costing more.1"3 All diese changes are resulting
current influence of economic and technical approaches
in an increasing gap between what is affordable and what
in fact imports values and ediical assumptions which are
is possible and wanted, a gap which will not narrow in the
often not recognized, questioned or debated. In part diis
future.
is because diese approaches are often presented (and
accepted)
as being ediically 'neutral'. This paper will
In taxation-based public health care systems, which are
consider
responses
to die gapsfroman ediical perspective,
die focus of this paper, the gaps between demand and
for
2
reasons.
First,
because the paper is based on an
supply and between affordable and possible health care
assumption
diat
healdi
care and health care policy should
are even clearer. Newspapers which once celebrated sendreflect
and
advance
social
values and moral principles.
ing patients wirii rare conditions to specialist internaHealth
care
not
only
is
part
of society but manifests the
tional centres are now noting the public cost of doing so
ideals
of
a
society,
and
in
some
senses represents the
and raising ethical questions about the care which is
height
of
human
civilization.
Secondly,
die paper proforegone by other patients as a result of such choices. Most
poses
that
future
approaches
to
managing
the gaps will
European governments have sought to limit expenditure
need
to
command
popular
public
and
health
worker supon public healdi programmes, in part to reduce taxes,
port
and
will
need
to
be
justified.
Relating
approaches
to
public sector borrowing and public debt and, more reediical
dieories
helps
to
examine
dieir
justification
and
cently, to prepare for a possible EU monetary converhighlights dieir advantages and disadvantages from pergence. Regardless of die rhetoric, die main public health
spectives
odier dian die economic and technical, such as
care policy objective in practice appears to be the control
from
humanist
and spiritual perspectives.
ofrisingpublic health care spending.
What
do
we
mean
by ethics, and which ediical dieories
There have been different responses to growing healdi
are
relevant
to
die
issues
considered in diis paper? Ethics
care expenditure, but the underlying issue of the gaps
are
principles
and
values
which guide or are realized in
between the affordable and die possible and between
how
we
treat
odier
people
in what we say or do and in the
demands and resources is only beginning to be recognized.
decisions
and
choices
which
we make. An 'ediical
There has not been a recognition of the need to manage
approach'
is
to
make
choices
explicidy,
to take responsthe gaps or do so in an explicit and ethical way. Because
ibility
for
a
choice
and
to
justify
a
choice,
usually in
of a failure to manage the gaps in nations widi public
relation
to
certain
ethical
principles
or
theories
of justhealdi care systems, people who can afford it are increas4
ice.
Most
ediical
dieories
assume
that
individuals
and
ingly turning to private healtii care. The existing insociety
can
make
choices,
but
differ
in,
amongst
odier
equalities in health status between different social classes
diings, dieir assumptions about how much freedom of
may increase as the more wealdiy secure dieir access to a
choice
we have.
wider range of health care. Failure to manage die gaps is
resulting in people leaving the public system and diis can
Examples of ethical principles are: i) acting to achieve the
lead to diem wididrawing their support for a tax-based
greatest happiness for the greatest number or to achieve
system. But is it unediical to prevent those people who
die greatest benefit for the least cost (utilitarian), ii)
can afford it from paying for the healdi care which diey
treating odiers as you would have diem treat you or as if
want, even if it leads to inequalities?
everyone should act in diis way (universalist), iii) acting
The following describes different strategies which are
so that the least-well off are made better off (one view of
viewed from the perspective of this paper as a way of
justice), iv) acting in ways which respect and do not
managing the gaps, although diese strategies are not
violate odier people's wishes and feelings (respect), v)
usually viewed as responses to die gaps. A reason why 5
recognizing die unique and equal value of every living
of die conventional responses to be described have not
person (absolutist, or natural rights) and vi) acting in a
stopped die gaps from widening is because none have
way which develops die spiritual awareness of ourselves
influenced the underlying causes of the rise in demand
and odiers (religious). These principles help to make
and supply. The sixdi response of rationing and priorexplicit rationing decisions, but also give criteria against
itizing has so far met with technical difficulties and etliical
which we can consider die effect on patients and on
objections. However, rationing and prioritizing can influhealdi service staff of die odier ways of managing die gaps
ence some causes of the increase in supply, for example
which are discussed below. In many European countries
by only funding proven effective treatments. If rationing
the principle of equity has governed many healdi service
and prioritizing involves the public, it can also influence
and policy decisions. In recent years healdi policy has also
die causes of demand by influencing expectations. More
drawn on ediical dieories which emphasizefreedomof die
EUROPEAN JOURNAL OF PUBLIC HEALTH VOL. 7 1997 NO. 2
individual to choose and this has come into conflict with
principles of equity.
RESPONSES TO THE GAPS
Do nothing
Some politicians do not recognize that the gaps between
demand and supply and between affordable and possible
health care are sufficiently large to warrant a policy response. Another group recognizes the gaps, but does not
believe that government action is called for, even in
countries with predominantly public healdi systems. The
result is longer waiting lists and a growth in private
insurance and private health and social care. In the UK
and the Nordic countries there is public concern that
treatments and care which were once taken for granted
are more difficult to obtain. People are more anxious that
they and their relatives may not obtain the treatment and
care that they need and when they need it. They are also
aware that the vulnerable, voiceless and the less vocal are
suffering in an increasingly inequitable system.
In a public system the 'do nothing' response is unethical
in at least 2 senses: it results in inequities in access to
health care and it leads to a drift to a private system
without proper democratic public debate. The latter may
in fact be the intention of certain politicians, whatever
their public policies. However, from one perspective there
is nothing unethical about allowing or even encouraging
people who can afford it to buy dieir own health care, in
particular if they continue to pay into die public fund.
Indeed, it is unethical to restrict a person's free choice and
right to self-determination in this way by having barriers
to private health care. The paper returns to this issue in
the section on 'doing more widi more' below.
Whatever the ethical considerations, the 'do nothing
response' is becoming less politically acceptable. It is
certainty not an option for health managers and practitioners who, every year, are faced with more patients and
less finance.
Do more with the same (or less)
Attempting to increasing die efficiency of healdi services
has been a common strategy in Europe over the last 15
years. Governments have used different methods, not just
to contain costs, but also to obtain more output for die
same input. In the 1980s many nations introduced new
payment systems and fixed budgets to give penalties for
poor efficiency and incentives to increase efficiency.
Some efficiency gains resulted,5 but fixed budgets often
turned out to be flexible.6 In the UK, Finland and in parts
of Sweden, Italy and Spain, internal market reforms were
introduced which forced providers to compete for public
finance, often on the basis of cost and without regard for
medical quality. Although die reforms in Stockholm
showed an increase in hospital productivity, after a decrease in productivity in die late 1980s, diere is no clear
evidence yet diat the efficiency gains in Stockholm or
elsewhere pay for die costs of such reforms. In general
9 terms, increasing efficiency is an ediical response because
it allows more care to be provided for the same resources.
External measures to stimulate efficiency, such as removing financial disincentives to increasing efficiency
can also be defended as ediical responses to die care gap.
However, increasing efficiency dirough competitive market-typereformsoften introduces inequity as well as conflicts for providers between protecting income and serving
some people widi needs but who carry little financial
benefit to die provider.
A second strategy is to increase efficiency by reducing die
work force by substituting capital equipment for labour
and introducing automation. However, there has been
less scope for this strategy in health services than in other
sectors because of the inherently labour-intensive nature
of the service. Opposition from unions and professions to
such strategies has been relatively successful and public
health services still serve as an important source of employment in certain areas. It has proved difficult to reduce
die number of staff working in the public health care
sector and to 'downsize' in the way most commercial
companies have done in recent years. Certainly more staff
are worried about their jobs than they were 10 years ago,
but whether fear is an effective incentive to improving
efficiency is questionable, regardless of the ediics of diis
strategy.
A diird and more successful strategy in the UK has been
to strengthen healdi management. The 1983 'Griffiths'7
general management reforms started a sustained programme of NHS management development which has
strengthened both management positions and management competence in the NHS. This has led to greater use
of management techniques for increasing efficiency, such
as management by objectives, performance indicators, job
redesign and skill mix reprofiling, organization development, management information technology and the
newer quality methods. Many other European countries
have yet to use stronger management to increase efficiency and there may be less scope to do so in countries with
strong local political control of health care and local
taxation-based funding for health.
A fourth strategy is to increase efficiency through attention to treatment effectiveness, cost-effectiveness and
appropriateness of treatment.9 Although there are problems in introducing the results of treatment evaluations
and guidelines into everyday practice, the 1990s will see
increases in the effectiveness of services and treatments
and this will affect the gap between supply and demand.
Although new technology has usually increased health
costs in the past, this need not necessarily be the case in
the future. Governments are making more use of technology assessment programmes to encourage new technologies which are more cost-effective or which save costs.
Examples are new, less-expensive drugs, genetic technology, screening and prevention techniques, computeraided diagnosis and expert systems, computer links between primary health care and specialists, self-help
treatments and new forms of service organization such as
those resultingfromprocess re-engineering. Although the
aim of testing techniques for their effectiveness and costs
Health policy and ethics
has an ethical basis, there are often ethical problems in
both evaluating and applying many new treatments and
technologies. For example, for a treatment to be a candidate for evaluation, there is usually some evidence that
it has some benefit: is it ethical to deny diis benefit to a
control group on the basis of die future possible benefit to
odiers which may come from evidence about effectiveness?
The current interest in outcomes and effectiveness is in
part based on the assumption that, if ineffective treatments are excluded, sufficient public finance will be available for demand. This in part depends on restrictive
definitions of 'effectiveness', but it may also be a fallacy
similar to die 'backlog of disease' notion of die early
British NHS, which predicted a drop in demand after die
new NHS had cured illnesses which had not been treated
before the system was introduced. It will also take time for
evidence of effectiveness to change even a small percentage of die estimated 80% of clinical procedures which are
yet to be evaluated.
These 4 strategies - incentives, automation, stronger
management and effectiveness - have enabled public
healdi services to do more widi die same or less finance
and, hence, lessen die impact of die gaps. Increasing die
effectiveness of healdi services is an ediical response to
die gaps, but is difficult and slow to do because some
interest groups have much to lose. Increasing efficiency
can also be an ediical response, but when it is done in a
way which exploits underpaid and overworked junior and
low-wage staff, rather dian investing in new production
processes, it is an unethical response. It is not a mediod
of 'managing' die gap because it leaves die demand side
untouched, because diere is a finite scope for labour
substitution in health services and because healdi services
have a limited impact on healdi - a problem also widi die
next and diird category of responses.
diere appears to be a consensus diat higher public expenditure on healdi is not an option because of die resultant
increase in taxation, public borrowing or national debt.
As a consequence many governments are considering
different ways of increasing private finance for healdi
services. One option is to encourage private capital investment for new facilities or equipment, an example
being die UK private finance initiative which requires
NHS Hospital Trusts to seek private capital finance and
makes it easier for trusts entet into joint ventures widi
private companies.12 Anodier option is to encourage
more people to take out private healdi insurance, for
example by giving tax incentives to do so.
More countries may introduce a basic healdi 'package',
paid for out of public finance and encourage different
schemes which individuals or employers can purchase, in
addition to die basic public coverage. Such an approach
will produce inequities in access and possibly also in
healdi status, aldiough some argue diat if die wealthy pay
for dieir own health care then more public finance will
be available for the less wealthy. Doing more with more
produces inequities if the finance is private or if the
finance does not come from progressive taxation or from
a financial system which operates in a similar way.1'
Increasing private finance for health care, with the many
ethical issues diis raises, is certainly going to be an important response to the 'care gap'. It is already one response
across Europe to the growing health care needs of die
elderly. But is concentrating on the supply of health
services and focusing on higher productivity or more
resources an effective or ethical response to the gaps? Can
or should somediing be done to influence demand and
would it be ediical to do so? Is there anything unethical
in the growth in advertising and media coverage which
generates demand for health care and a relendess pursuit
of health?
Do more with more
Change people
Increasing die amount of healdi services by increasing die
resources going into die services is a diird category of
responses to die gap. Widi shorter hospital stays and
policies to reduce 'dependence' on public services, people
are being cared for at home, often by dieir relatives or
unpaid volunteers or not cared for at all. The expansion
of die 'informal' or unpaid work-force to add to die supply
side to meet higher demand is one unrecognized strategy
to narrow the gap. Aldiough employment patterns and
otiier changes in society are increasing die amount of
voluntary care and self-care, there are limits to ordinary
people's ability and willingness to take on die rising
'burden of care', especially after many years of comprehensive public welfare provision. The 'shifting die burden
of caring' is ediically questionable if diere is no choice for
the patient or carer - it can disadvantage die less-well off
and often exploits women, even if it does release resources
for treating more patients.
A more openly debated mediod of increasing die supply
side is to increase die amount of finance for public and
private healdi care.10'11 In many European countries
A fourth category of responses is to change the need and
demand for health care either by trying to change people's
behaviour so that they become ill less often or by changing
their expectations. Health promotion campaigns and die
media encourage healthier lifestyles and can reduce die
need for health care. Many European countries have
increased and improved the effectiveness of their health
education programmes and encourage people to use
screening services. Attempts to change behaviour have
had some success and reduced the need which would
odierwise have arisen (e.g. AIDS campaigns), but attempts to change diet, exercise patterns and smoking
behaviours have been less successful. The law of the
'omnipotence of health' is diat healthy people tend not
to change unhealdiy behaviours until they become ill and
only then if diey are subjected to well-designed and
provided healdi education at die right moment. There
are ethical objections to the state interfering with an
individual's personal choices. In addition, disadvantaged
groups in society often have less scope for changing their
behaviour and unhealdiy working and living conditions:
EUROPEAN JOURNAL OF PUBLIC HEALTH VOL. 7 1997 NO. 2
it may be that health promotion has a greater impact on
the more wealthy.
Changing people's expectations is another way of reducing
the demand for health care and a method which has not
been used in an intentional way to any great extent. As
the gap between demand and supply grows, people's expectations of public health services can decline as they
experience more difficulties in getting the services which
they and their family want or require. More emphasis on
service quality is causing practitioners to clarify and negotiate patients' expectations at the earliest stage, in order
to avoid dissatisfaction or complaints when the patient's
experience turns out to be less than their expectations.
One consequence of the patients' rights movement and
the patient's charter in the UK1^ may be to make clear
the limits of what can be provided by public health
services. We have yet to see national programmes aimed
at reducing expectations, although many health promotion programmes do emphasize individuals' responsibilities for their own and their family's health. There are
ethical objections to strategies to reduce peoples expectations of health and of health services, objections which
are apparent when we consider definitions of health.
and older people are quickly transferred from hospital to
private nursing homes. The question of whedier diey
have healdi needs determines whedier dieir care is paid
for out of public funds. There is new guidance for die care
of elderly patients no longer needing medical care, but
still needing active nursing care. Another example is an
attempt to define needs in terms of effectiveness, 'There
is only a need where there is a potential benefit, i.e. where
the intervention and or die care setting is effective'. 1 '
However, narrowing the definition of healdi needs to
acute medical emergency services frequently disadvantages poor or vulnerable people who most need longterm care, public health promotion services and care on
the boundaries between social and healdi care.
In summary, the 5 categories of responses have had some
effect, but have not always been ethical. They have not
managed die gap between publicly affordable healdi care
and demand, have not directly addressed the causes of die
gap and have tended to view demand and supply issues
separately rather dian as being in a dynamic relationship.
As die gap increases, more ethical and justifiable strategies
will be necessary and the gap will need to be explicitly
managed. A sixdi category of responses - rationing and
prioritizing - is now becoming more important and may
be able to influence bodi supply and demand and die
dynamics between them.
Redefine health needs and the need for health care
A fifth category of responses is to narrow the definition
of health needs and the need for health care. One reason
for the growing gap between demands and supply is the
broadening of the definition of health which has occurred
since the Second World War. Even narrow definitions,
such as 'absence of disease' have been broadened by the
'medicalization process' and the efforts of the pharmaceutical industries. Sociological critiques have not narrowed the definition but broadened it in another direction. An example of a broad definition is the W H O
definition of 'complete physical, mental and social wellbeing'. More recently a report to promote priority-setting
defined 'health need' as existing not only when a person
is 'restricted in their normal functioning', but also when
'there is a threat of such restriction'. 15 Ethical theory has
contributed to this broadening by emphasizing that
health is a prerequisite for self-fulfillment and for being
fully human. 16
Rationing and prioritizing
'Rationing' and 'prioritizing' are an increasingly important response to the gap. The terms are often used interchangeably, but may be distinguished in die following
way. Rationing is 'restricting supply by explicit or implicit
means, where demand exceeds supply, and where market
mechanisms do not relate supply to demand in an acceptable way'. Prioritizing is, 'deciding who goes first, or die
relative proportion of resources allocated to a patient,
patient group, population, or service'. 18
Rationing (restricting supply) can be done on arbitrary or
subjective grounds or it can be done on the basis of an
explicit and systematic prioritizing exercise, as for example in die Oregon approach. 1 ' 1 Approaches to rationing
can be classified into 3 dimensions:
Governments responsible for public health systems would
be excused for thinking that there is a conspiracy to
redefine health needs in a way which will generate the
maximum demand for health care services. In fact the
continual broadening of the definition of health may help
governments and insurance organizations to detach the
concept of health need from the need for health care and
from the need for public healdi care. From die beginning
of the NHS, successive UK governments have attempted
to restrict the definition of healdi need to die need for
medical services. Although broader definitions are implied in statements of NHS health service goals and
policies, more recent action is to restrict die definition of
healdi need. An example is die redefinition of healdi and
social care in die UK NHS. There has been a steady
reduction in 'continuing care' NHS beds for the elderly
• The level of application - individual patient/practitioner, service, local area and nation.
• Implicit or explicit.
• Degree of comprehensiveness - at one extreme, ad hoc
treatment exclusions and at die odier extreme, total
resource allocation reviews which redistribute resources
across different services/patient groups according to defined criteria. Treatment exclusions (rationing) can be
one of die outcomes of total resource allocation reviews
(prioritizing), as in the Oregon approach.
Healdi practitioners, managers and politicians have always rationed public healdi care in different ways, for
example by die following.
i) Price (for example, reducing demand by requiring patients to pay a contribution for service visits or for medicines).
Health policy and ethics
ii) Queuing or waiting (for example, waiting lists reduce
demand because some people go elsewhere or die health
condition improves or people die whilst waiting),
iii) Restrictions on direct access (for example, inconvenient opening times, difficult access for the disabled or
elderly).
iv) Debarring rules (for example, refusing treatment to the
homeless or foreign nationals).
v) Failure to publicize (for example, starting a direct
access community mental health service but not publicizing it).
vi) Deterrent low standard of service (for example, poor
quality facilities and waiting areas and unhelpful staff),
vii) Personal opinion of provider (for example, refusing
treatment to older people).
viii) Restricting time on one case (for example, deciding
how long to spend on each patient in ward rounds or
reviews).
ix) Objective or subjective prioritization of need (for
example, in busy accident and emergency services or in a
war situation).
x) According to likelihood of benefit (for example, not
undertaking some heart treatments for smokers),
xi) According to public preferences and demand for particular treatments or interventions (for example, giving acute
health care higher priority than health education).
Some of these approaches to rationing are not based on
any explicit criteria which can be challenged and lead to
actions which can be criticized on ethical grounds. Some
are based on implicit or explicit criteria for deciding who
will and will not benefit from a scarcity of resources. These
criteria are related to assumptions about or theories of
justice, such as those noted earlier in the paper: needsbased, utilitarian, merit or random selection-based theories. Understanding the ethical criticisms of approaches
to rationing helps to develop the more ethical approaches
which will be needed in the future and which will be
discussed later in the paper.
Needs-based approaches, such as ix) and xi) in the list
above, have been criticized on both ethical and practical
grounds. As noted earlier, needs can be defined in different ways and each way will advantage some groups and
disadvantage orhers. An expert definition of need does
not allow democratic debate or properly reflect public
values and limits choice. However, defining need or rationing criteria through public consultation alone is problematic: it may give a definition of the wants and values
of the articulate and advantaged in society and the public
are poorly informed about treatment effectiveness, which
some believe must be considered in an ethical approach
to rationing.
Utilitarian approaches, such as x) in the above list, justify
allocating resources to the interventions which lead to
the greatest benefit for the greatest number of people.
Benefit is usually represented in terms of the number of
lives saved or life expectancy or the quality of life for the
cost. The ethical criticisms are that it is difficult to predict
benefit from treatment in general and for a particular
individual and that it leads to resources being allocated
to treatments which can be proven to be effective, rather
than to treatments which have not been evaluated or to
caring services which do not give demonstrable cures but
do give relief of suffering. Allocating resources according
to the number of quality-adjusted life years which an
intervention gives is one approach which partially meets
these criticisms, but this approach has also been criticized
on ethical grounds for favouring the young over the
old.21"23
Probably the most common and popular approaches to
rationing are to justify who will and will not get resources
on the basis of a characteristic of the person or group, such
as their past behaviour or present and future social value.
This approach has been used in the past by doctors (e.g.
iv), vii) and ix) from the list above) and rhere is some
evidence from the UK that the public may support this
approach: in a survey on how the NHS should discriminate among patients in rationing situations, the largest
group responding said that those who had cared for their
health should be given preference over those who had
not. Theories of justice which underlie these approaches are termed 'desert' theories because they justify
giving resources to those who are judged to be deserving
in some way. One criticism of this approach is that relating the resources which someone gets to their social
worth or past behaviour is arbitrary and subjective and
involves making moral judgments about the value of a
person. Another is that it can disadvantage those who are
already disadvantaged and increase inequities and it also
assumes that people have free will to choose healthenhancing environments and behaviour.
The practical and ethical problems associated with each
of these approaches have led some to support the 'lottery',
or 'first-come first-served' approach because this gives
each person an equal chance of treatment without making
judgments about them, their need or their ability to
benefit. However, this assumes equal access to services
and also can be criticized as unethical in avoiding the
responsibility for making choices and for trying to improve the way in which choices are made.
MANAGING THE GAP BY ETHICAL RATIONING AND
PRIORITIZING
Rationing has been one response to the gaps described,
but has not always been effective, accountable, or ethical.20'2 li25 ' 26 Many of the approaches listed above have
been at the practitioner level or result from resource
allocation decisions which limit the resources to a particular service.21 More ethical and accountable rationing
and prioritizing will mean recognizing and facing conflicts
between different ethical principles and deciding which
are the higher values and principles which should govern
different choices. It involves examining the justifications
for not funding, withholding or constraining some services. 2 ' Some of these justifications are that, with finite
resources i) some needs/conditions are less life-threatening or painful than others, ii)need is unproven or capacity
to benefit from a treatment is limited, iii) a treatment or
a service is ineffective or of unproven effectiveness or the
EUROPEAN JOURNAL OF PUBLIC HEALTH VOL. 7 1997 NO. 2
benefits are low for a high cost, iv) there is little public
support for contributing public finance for this purpose,
v) the condition is avoidable by more responsible individual behaviour, vi) the individual has an alternative to
public service (private insurance, wealth) and vii) generally, the use of resources in this way means that it is not
available for other uses which produce a greater benefit
which is valued more highly by society.
There are ethical objections to all of these as criteria for
rationing. However, the criteria are explicit and, it will
be argued, a method which combines these approaches
would result in rationing and prioritizing which is more
ethical that die present arrangements. To demonstrate
this the following gives an example of an approach developed by 7 UK health purchasing authorities in
1993/1994.
The comprehensive 'step approach'
The framework was developed to draw on the strengths
of both the Oregon 19 and Dunning 15 approaches, but to
be more simple because of the limitations of staff time and
resources in die purchasing authorities. These strengths
were combining cost-effectiveness analyses with professional views and an appropriate role for die public. The
framework is 5 steps, which successively exclude certain
needs, treatments and providers, according to explicit
criteria. 18 ' 25 The aim was to move from an ad hoc withdrawal of treatments or services which the audiorities
were beginning to do, to an approach which prioritized in
a systematic and explicit way in order to allocate resources
equitably and to use resources to 'do the most good for the
least cost'.
The first step in the process is to exclude or restrict certain
demands or needs from being met by using public health
funds to pay for the interventions. Examples are needs for
cosmetic surgery where there is no medical need. This step
involves listing the needs which authorities are required
to meet according to national law and policies and noting
the scope for local discretion. The second step aims to
exclude from public financing treatments which are
known to have no benefits or to have a low cost-effectiveness. This step involves assessing the added value of
different treatments and considering the effect of treating
or not treating.
The third step concentrates on the needs and treatments
to be publicly funded which remain after the first 2 steps.
The aim is to select the best provider according to criteria
which include good outcome performance, low cost and
public preference. The problem in this step was obtaining
accurate information from providers about costs and outcome performance, which also allowed valid comparisons. There was also debate about whether information
about waiting time and outcome performance should be
made routinely available to the public and GPs, in order
for them to make more informed decisions about which
provider to use.
Having excluded certain needs, treatments and providers,
the fourth step involves reviewing the proportions of the
total budget which are allocated to different services,
needs and populations. The aim was to shift financial
allocations to areas which promised high 'health gain' 28
from areas where health gain was low for the expenditure
('horizontal allocation'). Once allocations are made for a
particular service or treatment, the next issue is to develop
guidelines for prioritizing patients who will receive the
service. This involves agreeing with GPs and providers
the protocols for prioritizing waiting lists ('vertical allocation'). The fifth step was where the purchasing authorities
were the least successful. This may have been because
different interest groups were not involved in the earlier
steps. 29 It involved carrying through changes to resource
allocations and provider services which followed from the
earlier steps. It meant reducing or withdrawing funding
and transferring resources, influencing and agreeing
changes to referrals and influencing public demand, in
part by providing information about provider performance.
To confront and manage the gaps, new approaches will
need to be more ethical. Those responsible for formulating and implementing the approach will need to be
more accountable. This includes explaining and justifying
the final decisions, having procedures for appeal and
involving the public in the process in appropriate ways.
The approaches will also need to be more effective in
actually carrying through the changes which are agreed.
Approaches like the one described above make it possible
to begin to manage the gaps between demand and publicly
affordable health care.
CONCLUSION
A health financing crisis faces nations with private and
with public health care systems. This paper conceptualized the crisis as a gap between the demand for and supply
of health care and between the affordable and possible.
Different actions on the part of practitioners, managers
and politicians have minimized the problems, but have
only reduced the rate of increase of the gaps. Rationing is
one action which has a long history in health care and
will become more important. As the gap between publicly
affordable health care and demand continues to increase,
responses will need to be both more effective and more
ethical. In the future a mixture of strategies will be
needed, but central to these will be rationing and prioritizing.
Many rationing and prioritizing methods are implicit and
applied by professionals, managers and political bodies
who do not account for or justify their decisions. For
rationing and prioritizing to become a more central
method for managing the gaps, both the procedures and
criteria must be explicit, challengeable and involve the
public and professions in appropriate ways. This will allow
a more ethical and effective approach to managing the
gaps. A systematic approach requires criteria and procedures at different levels, each level setting the parameters
for the level below: the national, regional and authority
levels, the service level and the level of the individual
practitioner and patient. Public health research and practice has a key role to play in developing and implementing
Health policy and ethics
better rationing and prioritizing processes and in keeping
issues of equity to the fore in countries where private
finance and provision of health care is increasing.30
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Received 31 January 1995, accepted 7 August 1995