Chapter 8.D.1: Rationing and Discrimination

To insert after Ch. 8.D.1 (p. 806):

Problem: Allocation Choices in a Public Program

You are CEO of a municipal hospital, funded by the county, looking at next year’s budget. This forces you to make tough allocation decisions. Due to your brilliant administrative leadership, the hospital managed to treat all patients who requested service last year, and it still has a $5 million surplus left over. After receiving recommendations from a task force, you have to choose among these three options:

  1. Return the money to the county to help them avoid an anticipated property tax increase.
  2. Buy one Very Big Fancy Machine (VBFM), which, over the course of its five-year useful life, will treat 100 patients a year, with a 1 percent better chance of saving their life compared with existing technologies. In other words, the machine is expected to save five lives at a cost of $1 million/life. On average, each person saved will live for ten more years. (Imagine a machine that helps resuscitate patients in the emergency room.)
  3. Buy 5,000 Really Simple Little Things (RSLTs), which have a 1 percent chance to extend life one year for each person who uses one. In other words, this will provide one additional year for 50 people, at a cost of $100,000 per person. (Imagine an expensive drug that does a better job of delaying but not avoiding death from cancer.)

Now, suppose you learn that patients treated with the VBFM will be left bed-ridden and debilitated but fully conscious, whereas RSLT patients will be left ambulatory but in pain and with diminished mental capacities. Assuming you were unfettered by the ADA, what do you do? Realizing, however, that the ADA might apply, does it potentially force you to change your mind? What factors determine what effect the ADA might have?

For further discussions of moral and public policy dimensions of QALYs and other criteria for rationing, see Chapter 6.D on allocation of organ transplants; Carl H. Coleman, Cost-Effectiveness Comes to America: The Promise and Perils of Cost-Effectiveness Analysis in Medication Coverage Decisions, 38 Ga. St. U. L. Rev. 811 (2022); Marion Danis et al. eds., Fair Resource Allocation and Rationing at the Bedside (2015); Larry Churchill, Rationing Health Care in America (1987); Frances Kamm, Morality and Mortality (1993); John Kilner, Who Lives? Who Dies? (1990); Paul Menzel, Strong Medicine: The Ethical Rationing of Health Care (1990); Eric Rakowski, Taking and Saving Lives, 93 Colum. L. Rev. 1063 (1993); Matthew D. Adler, QALYs and Policy Evaluation: A New Perspective, 6 Yale J. Health Pol’y L. & Ethics 1 (2006); Sharona Hoffman, Unmanaged Care: Towards Moral Fairness in Health Care Coverage, 78 Ind. L. J. 659 (2003); Norman Daniels & James E. Sabin, Setting Limits Fairly: Can We Learn to Share Medical Resources? (2000); Jennifer Prah Ruger, Health, Capability and Justice: Toward a New Paradigm of Health Ethics, Policy and Law, 15 Cornell J. L. Pub. Pol’y 403 (2006); Amy B. Monahan, Value-Based Mandated Health Benefits, 80 U. Colo. L. Rev. 127-200 (2009); Ani B. Satz, The Limits of Health Care Reform, 59 Ala. L. Rev. 1451 (2008); Symposium, 12 Value in Health S1 (2009). For a harrowing account of hospital rationing in the aftermath of Hurricane Katrina, see Sheri Fink, Five Days at Memorial: Life and Death in a Storm-Ravaged Hospital (2013).

For discussions of comparative medical effectiveness (note 1), see Eleanor Kinney, Comparative Effectiveness Research Under the Patient Protection and Affordable Care Act, 37 Am. J. L. & Med. 522 (2011); Richard Saver, Health Care Reform’s Wild Care: The Uncertain Effectiveness of Comparative Effectiveness Research, 159 U. Pa. L. Rev. 2147 (2011); Sean Tunis, Reflections on Science, Judgment, and Value in Evidence-Based Decision Making, 26 Health Aff. w500 (2007); Note, 21 Ann. Health L. 329 (2012); Symposium, 31 Health Aff. 2225 (2012); Symposium, 29 Health Aff. 1756 (2010); Govind Persad, Priority Setting, Cost-Effectiveness, and the Affordable Care Act, 41 Am. J. L. & Med. 119 (2015).

For discussions of Medicare’s refusal to explicitly consider costs in making coverage decisions, see Nicholas Bagley, Bedside Bureaucrats: Why Medicare Reform Hasn’t Worked, 101 Geo. L. J. 519 (2013); Jacqueline Fox, The Hidden Role of Cost: Medicare Decisions, Transparency, and Public Trust, 79. U. Cin. L. Rev. 1 (2011); S. Dhruva et al., CMS’s Landmark Decision on CT Colonography, 361 New Eng. J. Med. 1316 (2009); Peter Neumann, Medicare’s National Coverage Decisions for Technologies, 27 Health Aff. 1620 (2008); Peter J. Neumann et al., Medicare and Cost-Effectiveness Analysis, 353 New Eng. J. Med. 1516 (2006).

For broader discussions of the use of cost-benefit analyses in legal and regulatory settings generally, see Matthew Adler & Eric Posner, Cost-Benefit Analysis: Legal, Economic, and Philosophical Perspectives (2001); Richard L. Revesz & Michael Livermore, How Cost-Benefit Analysis Can Better Protect the Environment and Our Health (2008); Identified versus Statistical Lives: An Interdisciplinary Perspective (I. Glenn Cohen et al. eds. 2015).

An excellent example of institutional choice analysis (note 2) applied to problems in health policy is Russell Korobkin, The Efficiency of Managed Care “Patient Protection” Laws: Incomplete Contracts, Bounded Rationality, and Market Failure, 85 Cornell L. Rev. 1 (1999). See also Einer Elhauge, Can Health Law Become a Coherent Field of Law? 41 Wake Forest L. Rev. 365 (2006); William M. Sage, Unfinished Business: How Litigation Relates to Health Care Regulation, 28 J. Health Pol. Pol’y & L. 387 (2003); Ezekiel Emanuel, Choice and Representation in Health Care, 56 Med. Care Res. & Rev. 1 (1999). See generally Neil Komesar, Imperfect Alternatives: Choosing Institutions in Law, Economics, and Public Policy (1995); Edward Rubin, The New Legal Process, The Synthesis of Discourse, and the Microanalysis of Institutions, 109 Harv. L. Rev. 1393 (1996).

For discussions of ADA issues generally and in insurance coverage and medical care (note 5), see Leslie Francis & Anita Silvers, Debilitating Alexander v. Choate: “Meaningful Access” to Health Care for People with Disabilities, 35 Fordham Urb. L. J. 447 (2008); Alexander Abbe, “Meaningful Access” to Health Care and the Remedies Available to Medicaid Managed Care Recipients Under the ADA and the Rehabilitation Act, 147 U. Pa. L. Rev. 1161 (1999); Mary Crossley, Becoming Visible: The ADA’s Impact on Health Care for Persons with Disabilities, 52 Ala. L. Rev. 51 (2000); Mary Crossley, The Disability Kaleidoscope, 74 Notre Dame L. Rev. 521 (1999); Maxwell J. Mehlman et al., When Do Health Care Decisions Discriminate Against People with Disabilities?, 22 J. Health Pol. Pol’y & L. 1385 (1997).

For discussion of the inevitable difficulties in balancing the ACA’s competing goals in light of its various restrictions on rationing (note 6), see Nicholas Bagley & Helen Levy, Essential Health Benefits and the Affordable Care Act: Law and Process, 39 J. Health Pol., Pol’y & L. 441 (2014); Sara Rosenbaum et al., The Essential Health Benefits Provisions of the Affordable Care Act: Implications for People with Disabilities (2011); Alan Cohen, The Debate over Health Care Rationing: Déjà Vu All Over Again?, 49 Inquiry 90 (2012); Alan Weil, The Value of Federalism in Defining Essential Health Benefits, 366 New Eng. J. Med. 366 (2012); Jesse Hill, What Is the Meaning of Health? Constitutional Implications of Defining “Medical Necessity” and “Essential Health Benefits” Under the Affordable Care Act, 38 Am. J. L. & Med. 445 (2012); Institute of Medicine, Essential Health Benefits: Balancing Coverage and Cost (2011).

For broader discussions of how health law addresses disability and discrimination issues, see Govind Persad. Evaluating the legality of age-based criteria in health care: from nondiscrimination and discretion to distributive justice. 60 B.C. L. Rev. 889-949 (2019); Jessica Roberts & Elizabeth Weeks Leonard, What Is (and Isn’t) Healthism, 50 Ga. L. Rev. 833 (2016); Jessica Roberts, Health Law as Disability Rights Law, 97 Minn. L. Rev. 1963 (2013).

For discussions of transplant funding (note 7), see Lisa Deutsch, Medicaid Payment for Organ Transplants: The Extent of Mandated Coverage, 30 Colum. J. L. & Soc. Probs. 185 (1997); Clark Havighurst & Nancy King, Liver Transplantation in Massachusetts: Public Policymaking as Morality Play, 19 Ind. L. Rev. 955 (1986); Note, 79 Minn. L. Rev. 1232 (1995); Note, 89 Nw. U. L. Rev. 268 (1994).

For discussions of the Oregon scheme and the legality of QALYs under the ADA (note 8), see Jonathan Oberlander et al., Rationing Health Care: Rhetoric and Reality in the Oregon Health Plan, 164 Canadian Medical Ass’n J. 1583 (2001); Kevin P. Quinn, Viewing Health Care as a Common Good: Looking Beyond Political Liberalism, 73 S. Cal. L. Rev. 277 (2000); Note, 93 Colum. L. Rev. 1985 (1993); Note, 106 Harv. L. Rev. 1296 (1993).

For discussions of the Hepatitis C drugs (note 9), see Judith Graham, Medicaid, Private Insurers Begin to Lift Curbs on Pricey Hepatitis C Drugs, Kaiser Health News, July 5, 2016; Valerie K. Blake, An Opening for Civil Rights in Health Insurance After the Affordable Care Act, 36 B.C. J. L. & Soc. Just. 235 (2016); Hannah Brennan et al., A Prescription for Excessive Drug Pricing: Leveraging Government Patent Use for Health, 18 Yale J. L. & Tech. 275 (2016).

For discussions of race and gender discrimination (note 10), see Lisa Kerr, Can Money Buy Happiness? An Examination of the Coverage of Infertility Services Under HMO Contracts, 49 Case W. Res. L. Rev. 559 (1999); Carl Coleman, Conceiving Harm: Disability Discrimination in Assisted Reproductive Technologies, 50 UCLA L. Rev. 17 (2002). For a related issue, see L. Dechery, Do Employer-Provided Insurance Plans Violate Title VII When They Exclude Treatment for Breast Cancer?, 80 Minn. L. Rev. 945 (1996); Christine Nardi, When Health Insurers Deny Coverage for Breast Reconstructive Surgery: Gender Meets Disability, 1997 Wis. L. Rev. 778.

For discussions of rationing care during the COVID-19 pandemic, see James G. Hodge Jr. & Jennifer L. Piatt, Legal Decision-making and Crisis Standards of Care, JAMA Health Forum, Jan. 21, 2022; Mildred Z. Solomon, Matthew K. Wynia, & Lawrence O. Gostin, Covid-19 Crisis Triage—Optimizing Health Outcomes and Disability Rights, 383 NEJM e27 (2020); Michelle Mello, Govind Persad, & Douglas B. White, Respecting Disability Rights — Toward Improved Crisis Standards of Care, 383 NEJM e26 (2020).