American Journal of Law & Medicine

Reflective choice in health care: using information technology to present allocation options.


Over the last few decades, the U.S. health care system has been the beneficiary of tremendous growth in the power and sheer quantity of useful medical technology.(1) As a consequence, our society has, for some time, had to make cost-benefit tradeoffs in health care.(2) The alternative--funding all health care interventions that would produce some health benefit for some patient--is not feasible, because it would effectively consume all of our resources.(3)

Managed care plans,(4) which have emerged as the market's preferred mechanism for making cost-benefit tradeoffs,(5) frequently make such tradeoffs by giving physicians financial incentives of various sorts to reduce their spending on medical testing, hospitalization and referral.(6) Alternatively, plans may give third-party utilization reviewers the authority to deny approval for treatments proposed by plan physicians.(7) Yet managed care organizations (MCOs) are typically under no legal obligation, common law or statutory, to disclose to prospective plan enrollees information regarding physician financial incentives or utilization review guidelines.(8) Indeed, the promotional materials issued by these organizations often promote the misconception that no cost-benefit tradeoffs will be made.(9) Managed care plans impose on enrollees spending tradeoffs that may be quite different from those that the enrollees would have chosen at the time of enrollment, had they been given an explicit, open choice regarding tradeoffs.(10)

As an alternative to this type of sub rosa rationing,(11) a number of commentators argue in favor of systems that allow individual consumers to make choices among health plans with explicit rationing schemes.(12) However, one important argument that frequently has been advanced by commentators opposed to consumer choice--oriented approaches is that these approaches falsely assume that consumers can make considered, autonomy-enhancing choices about their health care priorities.(13) This Article examines the issue of consumer choice with an eye toward determining whether and how information technology could assist individuals in making truly reflective health care rationing choices. The Article argues that information technology could squarely address the concerns voiced by opponents of choice by giving consumers a genuine understanding of how different allocation mechanisms worked. Information technology could also facilitate communication among patients who have chosen a particular allocation mechanism.(14)

This Article divides into three parts. Part II briefly surveys various consumer choice-oriented approaches to health care rationing. Part III addresses the objection that choice in the health care arena is not desirable, because consumers cannot make autonomy-enhancing, reflective choices in this arena. Part IV discusses the range of mechanisms by which information technology could facilitate reflective choice.


A number of commentators have suggested approaches toward rationing that focus on consumer choice. Market theorists have developed one set of choice based literature. Market-oriented commentators view choice as necessary because individuals, particularly individuals of different income levels, will have different preferences regarding how they want to trade off health care spending against other spending priorities. For example, although wealthier consumers may prefer a "Cadillac" plan, the less wealthy might prefer a "Chevrolet" plan, which leaves them money to spend on other activities.(15) Market-oriented commentators, therefore, suggest that managed care contracts make explicit their level of rationing, in other words, the extent to which cost-benefit tradeoffs will be made.

For example, Ira Ellman and Mark Hall propose a scheme under which the contractual obligations of various insurance plans are defined in terms of budgets for particular pools of patients.(16) Thus, for a certain premium, a subscriber could elect a policy that spent an annual sum of two million per 1,000 insured individuals on health care; alternatively, for a higher premium, the subscriber could elect a policy that spent a larger pool of money, say four or six million.(17) This allocation model, which Ellman and Hall term Budgeted Risk Preferences (BRPs), could also be applied to particular categories of procedures.(18) For example, some plans might allocate $50,000 per year per 10,000 members for magnetic resonance imaging (MRI) or computed tomography imaging scans; for a higher premium, others might allocate $100,000.(19) Whether the BRP pool was general or procedure-specific, the dollars within the pool would be allocated on a comparative need basis among subscribers. For example, in the case of the MRI allocation, those for whom an MRI had the highest probability of revealing useful new information would receive the MRI.(20)

Clark Havighurst's proposed contractual approach also focuses on different levels of rationing.(21) According to Havighurst, the health insurance contract of a relatively economical plan could specifically state that by "subscribing to the Plan, you agree to accept the risk that some services you may desire in the future may not be provided under this Contract."(22) To illustrate the type of risk involved, the contract could give examples of services not provided by the plan. For example, the contract may state that the "Plan will pay only for the drug streptokinase for heart attack victims rather than the more costly drug TPA, even though some physicians believe that the latter is slightly more effective in preventing subsequent heart attacks."(23)

Havighurst acknowledges that merely including some contractual language regarding cost-benefit tradeoffs is far from ideal; an ideal contract would specify the health plan's manner of trading off costs and benefits in every possible medical exigency.(24) Havighurst believes that this ideal could ultimately be approached by having health care contracts incorporate by reference specific health care practice guidelines.(25) These health care practice guidelines would be "selected from a universe of alternative guidelines, each expressing different, scientifically supportable, variously cost conscious conclusions on specific clinical issues."(26) In Havighurst's view, although current practice guidelines generally are not structured to confront the issue of cost,(27) various sets of guidelines that did make different levels of cost-benefit tradeoffs could be developed.(28)

As an example of how practice guidelines could incorporate cost considerations, Havighurst invokes the three tier American College of Cardiology/American Heart Association approach to classifying indications for coronary angiography.(29) Class I indications are "conditions for which there is general agreement that coronary angiography is justified"; Class II indications are "conditions for which coronary angiography is frequently performed, but there is divergence of opinion with respect to its justification in terms of value and appropriateness";(30) and Class III indications are "conditions for which there is general agreement that coronary angiography is not ordinarily justified."(31) Havighurst proposes that the health plan contract for a less generous plan would state that it covered coronary angiography for patients who fell into Class 1.(32) A more generous plan contract would state that it covered the procedure for patients who fell into Classes I and II.(33) Havighurst also argues that a RAND Corporation approach, in which researchers rate medical procedures on various different scales of "appropriateness" and "necessity/ cruciality," could be used to establish different tiers of rationing.(34) Less generous plans would cover only procedures that ranked high on these scales.(35) More generous plans would cover not only highly ranked procedures, but also procedures that were ranked further down on these scales.(36)

By contrast with market-oriented commentators, those commentators who argue from an explicitly moral-ethical standpoint emphasize that, even independent of income level, individuals have divergent health values and allocational preferences.(37) For example, when individuals are asked what they would be willing to pay to avoid particular types of morbidity and mortality, their responses vary widely-anywhere from $25 to $145 per day to avoid a headache and from $40,000 to $130,000 per year to avoid the morbidity associated with lung cancer.(38) Moreover, these differences in valuation persist even when the economic status of the respondent is factored out.(39) Similarly, data from a telephone survey of Oregonian citizens demonstrate that individuals who are asked to rank various health states on a scale of 0 (a situation "as bad as death") to 100 (a situation that describes "good health") rank the same health states quite differently.(40) Individuals who view the same health states in divergent ways would presumably also have divergent preferences as to how health care dollars to alleviate those states should be allocated. A single mechanism for making cost-benefit tradeoffs would override these diverse individual views and preferences. Commentators who argue from an ethical standpoint, therefore, suggest that choices as to how rationing is done, as contrasted with choices about rationing levels, should be available.(41) Thus, for example, some of the following schemes could be offered: (1) schemes that require significant deductibles and copayments at each level of expenditure; (2) schemes in which physicians operating under modest, clearly disclosed financial incentives are given rationing responsibility; (3) schemes that use random allocation or ration according to greatest need; and (4) various utilitarian schemes that maximize certain measures of health benefit. …

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