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The U.S. Health Delivery System: Inefficient and Unfair to Children

Published online by Cambridge University Press:  24 February 2021

Loretta M. Kopelman  and
Michael G. Palumbo
Loretta M. Kopelman
Affiliation:
Department of Medical Humanities, East Carolina University, Greenville, N.C.27858
Michael G. Palumbo
Affiliation:
Department of Economics, University of Houston, Houston, Texas, 77204-5882
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Extract

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. In the United States, however, allocation of health care resources has largely been left to personal choice and market forces. Although the United States spends around 14% of its gross national product (GNP) on health care, the United States and South Africa are the only two industrialized countries that fail to provide citizens with universal access.

Type
Articles
Information
American Journal of Law & Medicine , Volume 23 , Issue 2-3: Managed Care Phase Two Structural Changes And Equity Issues , 1997 , pp. 319 - 337
Copyright
Copyright © American Society of Law, Medicine and Ethics and Boston University 1997

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References

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6 See id. (displaying Canada’s percentage of GNP spent on health care). Maynard and Bloor also point out that Australia and Germany spend approximately 8.5% of their respective GNPs on health care. See id. France spends just over nine percent of its GNP on health care. See id.

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32 There are, of course, other important moral and social values that affect the quality of chil dren’s well-being or opportunities, such as guardians’ duties, rights and choices. Guardians’ authority, however, is not absolute and where guardians endanger children’s well-being or opportunities through abuse or neglect, the state can step in to protect the child. See id. at 358-61.

33 See id. at 363-67. Portions of this section were adapted from this work.

34 See id.

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36 See, e.g., Brock, supra note 1, at 216; Kopelman, supra note 31, at 357, 363 (citing Starfield, supra note 19).

37 See Kopelman, supra note 31, at 363 (discussing resource allocation for children’s health).

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51 See Kopelman, supra note 31, at 364-65.

52 For further discussion on how they try to do this and criticisms see VEATCH, supra note 50, at 189; Brock, supra note 1, at 221.

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54 See id. at 520-21.

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60 For example, Part B of Medicare is optional, yet is heavily subsidized with public funds for those who can afford it.

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70 See VEATCH, supra note 50, at 14.

71 See rawls, political liberalism, supra note 63, at 126. For further discussion in the utilitarian context, see Brock, supra note 1, at 219-21.

72 See DANIELS, supra note 66, at 221-29; Brock, supra note 1, at 217; Daniels, supra note 35, at 228-29.

73 See DANIELS, supra note 66, at 14-15; Brock, supra note 1, at 219-21; Daniels, supra note 35, at 228-29.

74 See Brock, supra note 1, at 218-19; Kilner, supra note 1, at 1073.

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77 Indeed, this proposition, commonly referred to as “The Fundamental Theorem of Welfare Economics,” is one of the basic tenets of neoclassical economic theory. The allocation of resources is said to be (Pareto) efficient if (and only if) improving any member’s welfare necessarily reduces the welfare of any other member of society. Thus, by definition, there does not exist a unanimously preferred allocation to an efficient allocation of resources. See generally id. at 212-17.

This section of the article draws heavily on the seminal work of Arrow, Kenneth J., Uncertainty and the Welfare Economics of Medical Care, 53 Am. Economic Rev. 941 (1963)Google Scholar. We wish to acknowledge Andrew Austin and Chinhui Juhn for valuable comments on a previous draft of this section. A good general introduction to these issues may be found in Rosen, Harvey S., Public Finance 38-54 (1995)Google Scholar.

78 See Arrow, supra note 77, at 941-42.

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80 See Arrow, supra note 77, at 944.

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82 See id. at 189-90.

83 See id. at 59.

84 For further discussion of these points, see HUDSON, supra note 81, at 63.

85 See id. at 169-92 (describing how society’s conception of disease dictates public health dis ease prevention measures). “[The] idea developed that society collectively had a special responsi bility ... in the protection of the common health.” Id. at 170-71.

86 See id. "[A] proper blend of governmental intervention and restraint could lead human be ings to do what was best for themselves, individually and collectively.” Id. at 178.

87 See ROSEN, supra note 77, at 94.

88 See id. at 52.

89 Information imperfections and health uncertainties seem equally relevant for the considera tion of child or adult patients, though the rest of our paper focuses on the former group.

90 Arrow, supra note 77, at 951.

91 See id.

92 See id. at 940.

93 For further discussion, see Pellegrino, Edmund D. & Thomasma, David C., The Virtues of Medical Practice 31-48 (1993)Google Scholar.

94 See MORREIM, supra note 57, at 148.

95 Id.

96 See id. at 2.

97 Id. at 144.

98 See Arrow, supra note 77, at 946.

99 See id.

100 See id. at 948-19.

101 The “right price" would be just high enough to earn a competitive profit level for the in surer and just low enough to be a good deal for the consumer. See id. at 969-73 app. (for a proof).

102 Arrow’s analysis actually is much more general than we imply here. See generally id. at 961-64. He describes several additional reasons asymmetric information between insurance provid ers and customers leads to inefficient levels of coverage in equilibrium by recognizing how complex (and, ultimately, infeasible) optimally written policies must be. Here, we simply describe the sim plest case, adverse selection, as an example of asymmetric information in health insurance markets.

103 Additionally, it should be noted, Arrow describes why it is not surprising that the market for health care cannot be considered perfectly competitive. See id. at 947. According to the fundamental welfare theorem, competition is a necessary condition for markets to operate efficiently. See id. at 944.