An interesting article appears in the Fall 2012 issue of the “The Journal of Law, Medicine & Ethics” titled “Justice and Fairness: A Critical Element in U.S. Health System Reform,” written by Paul T. Menzel.
In the article Paul discusses how unfettered competitive markets in health insurance generate market failure. The market failure of course is the fact that in an unfettered competitive market, health insurance will inevitably be out of reach for many (even most) of those who desire and need it most.
In the article Paul discusses a term he coins the Just Sharing principle
“The financial burdens of medical misfortunes ought to be shared equally by well and ill alike, unless individuals can be reasonably expected to control those misfortunes by their own choices.”
Paul goes on to say
“Just Sharing is incompatible with pre-existing condition exclusions, high degree of premium variation by subscriber risk, rescission of insurance when a subscriber becomes high-cost, and other market segmentation devices that inevitably arise in an unfettered competitive insurance market, creating market failure. If one only bars insurers from using these devices, however, then the “death spiral” for insurance begins: community-rated premiums lead even more of the likely well to forego insurance, which this raises premiums for remaining subscribers even more, and the cycle deepens. Basic insurance must be made mandatory for a competitive market to avoid leaving many of those who most need insurance high and dry. The heart of the moral objection to leaving many high and dry is that the likely well ought to contribute more to insurance than their individual risk situation alone warrants. That is, a good share of the expense of illness should be shared by well and ill alike.”
In the middle of the article Paul goes onto a discussion of what he coins the Equal Opportunity for Welfare along with the Emergency Medical Treatment and Active Labor Act. I won’t go into all these details here so I encourage you to read the article.
Later in the article Paul addresses the issue of comparative cost effectiveness.
“Suppose that for treating a given condition, two treatments are equally effective but not equally cost-effective; one carries higher cost for the same likely benefit. If I am required to contribute funding through mandated insurance, my assistance and investment is being partly wasted if it is devoted to care that is no more effective but costs more. If people are going to be required to share in the expenses of those who fall ill and need care, then plans and providers owe them a commitment not to waste their financial support. And covering less cost-effective treatments for a given condition, not just the more cost-effective measures for the same prospective patients, is — let’s be clear and accurate here — a waste.”
“This is exactly how various parties in European health care systems that provide care which is typically as effective as that in the U.S. but at little more than half the cost put the matter. The statement that “inefficiency is unethical” made by Marc Danzon, head of the WHO Regional Office for Europe, has become a kind of dictum in European circles. Efficiency is not a moral luxury. It is a moral obligation.”
The article by Paul certainly covers some interesting points and is worth the read.