American Journal of Law & Medicine

The U.S. health delivery system: inefficient and unfair to children.(Managed Care Phase Two - Structural Changes and Equity Issues)


What proportion of health care resources should go to programs likely to benefit older citizens, such as treatments for Alzheimer's disease and hip replacements, and what share should be given to programs likely to benefit the young, such as prenatal and neonatal care? What portion should go to rare but severe diseases that plague the few, or to common, easily correctable illnesses that afflict the many? What percentage of funds should go to research, rehabilitation or to intensive care? Many nations have made such hard choices about how to use their limited funds for health care by explicitly setting priorities based on their social commitments.(1) In the United States, however, allocation of health care resources has largely been left to personal choice and market forces.(2) Although the United States spends around 14% of its gross national product (GNP) on health care,(3) the United States and South Africa are the only two industrialized countries that fail to provide citizens with universal access.(4) In contrast, the United Kingdom spends about 7% of its GNP on health care to give all citizens universal access to basic services(5) and Canada uses around 11% of its GNP to provide all citizens a single-tiered system of health care coverage.(6)

Despite this great expenditure of funds, 15% of the U.S. population is uninsured (40 million),(7) with 25% of them children (10 million);(8) many of the children are less than three years of age.(9) An estimated 14.2% of the children in this country are uninsured, a proportion that has steadily grown over the last decade.(10) Moreover, many commentators do not expect insurance for children to improve as U.S. health delivery systems turn to market forces to solve problems of cost containment and limiting access.(11) Children, as well as poor women, will likely bear the greatest share of cost-cutting efforts as, for example, more employers seek savings by providing health care insurance for employees but not their family members.(12)

Reliance on choice and market forces has already left many children in the United States without basic health services.(13) U.S. female children have the highest death rate among the world's affluent countries.(14) U.S. infant mortality, an indication of general health, stands eighteenth among the industrialized countries.(15) In particular, children from poor and working poor families bear the worst of such inequalities.(16) These children also suffer lost well-being and opportunities from poor health care.(17) American children living in low-income homes get sicker more and stay sicker longer.(18) They are two to three times more likely than children in high-income homes to be of low birth weight, to get asthma and bacterial meningitis, to lack immunizations and to suffer from lead poisoning; poor children are also three to four times as likely as other children to become seriously ill and get multiple illnesses when they become sick.(19) Moreover, the main health problems of children in the U.S. arise from a failure to provide basic and inexpensive care for children, including their allergies, asthma, dental pathology, hearing loss, vision impairments and many chronic disorders.(20)

Because the electorate generally perceives that children do not need more services, senior U.S. congressional staff and administrators predict health care entitlements for children will not change any time soon.(21) The poorest people in our society, they note, have health-care insurance; by the year 2001, all children up to nineteen years of age living below the poverty level will be eligible for Medicaid, and under 1997 laws children up to fourteen years of age are covered.(22)

Nevertheless, families earning more than the poverty level (currently around $14,000 for a family of four) do not generally qualify for assistance; many of the working poor cannot afford insurance.(23) Explaining congressional reluctance to protect the millions of uninsured U.S. children, pundits note, "the maxim that has always been the bane of child health advocates was heard repeatedly [from congressional staff and administrators] as the central reason little more will be done for children's coverage: 'Kids don't vote.'"(24)

In what follows, we argue that the U.S. health-delivery system's neglect of so many children is both unfair and economically inefficient. In Parts II and III, we show that it is unfair to children based on any of four important theories of justice: utilitarianism, egalitarianism, libertarianism and contractarianism. Agreement from such diverse approaches shows that when a society can afford to do so, it is unjust not to provide access to basic health care to all its children. In Part IV, we point out that because these four popular theories of justice offer conflicting strategies for allocation of resources, it may seem tempting to avoid difficult choices by relying on personal choice and market forces to solve allocation problems. However, Part V demonstrates that this market-based approach not only treats children unfairly, but also seems economically inefficient. A market system of allocation can be a highly efficient mechanism where the following three necessary conditions exist: first, competitive forces determine prices; second, information about product quality is easily available; and third, all benefits and costs of purchases accrue to buyers. Because these conditions do not exist in the context of health care generally, and especially for children's health care, strict market allocation will create inefficiencies in child health care. We discuss how certain characteristics of children's health care -- external effects due to such factors as disease contagion and our imperfect information about medical needs, diagnoses and treatments -- create inefficient medical outcomes according to a strict market allocation.


Philosopher David Hume identified two necessary, though not sufficient, conditions of a just distribution of resources.(25) First, he argued that just allocation schemes require conditions of moderate scarcity.(26) If a society enjoys great abundance, he argued, it does not need allocation schemes; with too little, allocation schemes become useless. With health care costs devouring increasingly greater chunks of the U.S. GNP, this precondition for a just allocation scheme articulated by Hume seems fulfilled. We cannot provide all potentially useful health care services to everyone who wants them.

Second, Hume argues that a just distribution of resources presupposes people to have limited benevolence for others.(27) Hume based his moral theory on the assumption that most humans, when they are disinterested, had some limited concern for others. According to Hume, justice and compassion are not opposite, but interwoven Hume observed that people generally respond compassionately to the plight, not only of our family and friends, but also of strangers caught in the web of disease, tyranny, war or famine. Our sentiments that something ought to be done to help them, argued Hume, create the possibility of systems of justice or moral communities.(28) Hume did not think we could rely too heavily on our benevolence for strangers, and therefore regarded this benevolence as limited. For example, most people might willingly make room at the table for those who are hungry if they themselves are not deprived too much, but balk at having most taken from them. Hume argued that just allocation schemes need social support about people's fair shares, and that these are not gained by people simply pursuing their individual self-interests.(29)

This second condition also seems fulfilled, because most adults exhibit some degree of benevolence toward children and accept some responsibilities to help them. For example, the United Nations Declaration of the Rights of Children enshrined these sentiments and beliefs, endorsing these basic values, and underscoring their wide acceptance.(30) These values also promote stability by helping to address inequalities of the "natural lottery" (the inequalities caused by nature such as health status) and of the "social lottery" (inequalities caused by social factors such as wealth, schooling or family).(31) Children are not responsible for such inequalities affecting how they thrive and flourish. In many industrial countries, basic health care is regarded as important as basic education, necessary for children's well being and opportunities.(32) Adequate health-care services enhance children's well-being and opportunities by treating diseases, in some cases returning children from the brink of death or permanent disability, to full and healthy lives. For example, without antibiotics, children often die of pneumonia, diphtheria and other common childhood diseases. These services also restore or maintain compromised function, avert or ameliorate suffering, and prevent disease or disabilities through interventions or counseling. Basic prevention, diagnosis, treatment, rehabilitation and emergency services not only make children's lives better, but profit society with healthier and more productive citizens.


Current allocation of health services in the United States is unfair to children based on any one of four major theories of justice: utilitarianism, egalitarianism, libertarianism and contractarianism. We discuss how versions of each theory support provision of basic health care for children when a society can afford such services.(33) This agreement shows that the failure to provide all children with basic services is unjust when a society can afford to do so. As a matter of justice, we should redistribute goods, services, and benefits more fairly to children in order to provide them with basic health services. Basic health care services promote children's well-being, enhance their opportunities in fundamental ways and correct some inequities due to the natural and social lotteries. Children who are sick cannot compete as equals and thus are denied equality of opportunity with other children. …

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