When a Michigan commission recently voted to deny several hospitals the right to build expensive “proton-beam therapy” sites for cancer treatment, it took a major step into the brave new world of explicit healthcare rationing.
The rationale behind the decision was fairly straightforward. Four hospitals had each planned to build a new proton-beam treatment facility, which provides a new type of radiation therapy for cancer using an enormous particle accelerator, at a cost of more than $100 million apiece. Instead, however, the state’s Certificate of Need Commission, which sets hospital-construction standards, said it would only allow one center to proceed, and ordered the state’s largest hospitals to work together to build and run it.
Proton-beam treatment may be more accurate — and thus somewhat safer and more effective — than traditional X-ray radiation therapy, although that advantage hasn’t really been proven to anyone’s satisfaction. Because the technology is shiny and new, however, hospitals see proton-beam centers as prestigious facilities that can attract new patients and doctors, potentially giving them an edge over their rivals. The centers are also likely to be quite lucrative, as high-end cancer care tends to be reimbursed by insurers at fairly high rates.
The problem for the state, of course, is that four new proton-beam centers would rack up huge medical costs. (All would likely operate at close to capacity, due to the way boosting the supply of new medical technologies tends to create fresh demand for their use.) “The costs of multiple centers, each having the most expensive medical equipment yet developed, would be tremendous,” the state commission said.
Because of their expense, proton-beam centers appear to be breaking down the reluctance of many states to explicitly ration medical care by interfering with hospital-construction plans. A similar commission in Illinois, for instance, said last month that it may deny one of two proton-beam facilities planned for the Chicago suburbs.
Of course, healthcare is already rationed in the U.S. — it’s just that it’s usually done so covertly and haphazardly via insurance status and the ability to pay large up-front hospital bills or significant coinsurance for expensive drugs. The main reason, of course, is that overt rationing is never very popular. States that decide to limit the availability of new but unproven treatments could very easily face a political backlash. Such policies can also cross powerful business interests such as hospitals and their partners, who can mobilize legal and political counterattacks.
Ugly as it is, however, explicit rationing is an entirely understandable response to escalating medical costs and hospitals that have no incentive not to build out expensive but duplicative facilities in their zero-sum pursuit of patients and profits. For that very reason, though, rationing is pretty likely to fail as a cost-control measure — it makes no one happy, and simply requires the expenditure of too much political capital in order to ward off intangible future costs.
Image by Flickr user freeparking, CC 2.0
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