The Rationing of Care and the Bubble Problem

Up until I started working at my current agency, I honestly didn't believe there was rationing in medical care. I knew there were inequalities between the care offered to the poor and the wealthy. But since I worked on an Assertive Community Treatment (ACT) team, where resources are shoveled our way and most institutional barriers (blessedly) do not exist, I never encountered rationing. Need housing? Fill out a housing voucher form and you will receive a voucher in a few weeks. Need medication? Get your psychiatrist to write a prescription for anything, even new medications, off-label treatments, and physical health medications (a common, but frowned upon practice for a specialist that will sometimes get you in trouble), and you can have it! The only real barriers to service I encountered were discrimination and the odd bureaucratic requirement. I really thought that claims of rationing were merely hyperbole spun by talking heads to demonize socialized medicine.

ACT and community support services (CSS) are on a continuum of outpatient services that run from most intensive (ACT) to somewhat intensive (CSS) to not intensive (social services). ACT was created to combat the so-called hockey-stick problem of public health. The graph for costs for many public health problems like emergency room visits, overdoses, and drug arrests looks like a hockey stick--a visual metaphor I would explain better if Malcolm Gladwell's awesome article wasn't behind a New Yorker paywall. Most of the services are used by a small number of people who bleed the system of money and resources. Take care of those people with ACT, you will save lots of money! So far, so brilliant!

Then I changed jobs. I started working with clients who require a lower level of service and who did not qualify for the same treatment as ACT consumers did. When they were prescribed Abilify, they were told by Medicaid or Medicare that they could only get Risperdal. When they were prescribed Clonazepam, they were told that benzodiazepines were not covered at all. In fact, we will suspend the license of your psychiatrist for prescribing too many anti-anxiety pills in spite of the demonstrated need of his patients. But I digress, my clients have nowhere near the access to the medications they need that my previous clients did.

The same problem extends beyond medical care into other forms of assistance. Those housing vouchers I took for granted in my old job? Turns out there's a long waiting list for people not on ACT teams. What about market rent? Well, thanks to housing vouchers, most landlords in the worst places of town will renovate the apartment completely (to pass the inspection) and wait for a tenant with a voucher to come along rather than rent to someone at market rate. Why take less money and more risk when you can get a guaranteed government check each month?

This leads to what I call the Bubble Problem. You've probably heard of this before in the context of health insurance. People are slightly too rich to qualify for public assistance but not rich enough to effectively utilize private insurance. The same thing happens when the government artificially limits the quantity of housing or medicines. We have those for whom it is more cost-effective for government not to ration care (ACT) and those for whom it is far more cost-effective to ration care (CSS).

As with most public policy problems, there is both a progressive and a libertarian solution. The progressive solution is to include all medications in spite of the cost and to dramatically increase funding for housing voucher programs. But what happens when 20% of the total city is below the poverty line? What happens when the system becomes people waiting out their turn in line for Section 8 housing? (Section 8 is now pulling names for people who registered 10 years ago, and not for vouchers but for apartments vacated in public housing where tenants have died or violated their lease.) What happens as newer medications come out and are given to an increasing percentage of residents? Well, it means that there is no market housing for people on public assistance. They are forced into an ever-lengthening queue of similar individuals competing for scarce resources. Resources, mind you, that are allocated not based on need but on central planning initiatives. Have too many vouchers for chronic inebriates and not enough for people with HIV? Too bad. You can't use one like the other. And how did HUD decide how many chronic inebriates there were going to be this year who needed housing?

You eventually realize you can't cover everyone and do everything, especially in a system with centralized planning and imperfect information. And even if you could, the incentives in that system are the inverse of what you would want. Mutual aid and support die out as each person competes for scarce resources. Compare that with the libertarian solution where a completely private charity market (in ideal, anarcho-libertarianism) provides whatever resources are available immediately based on individual need. This system runs the not-unserious risk of underfunding and greater risk of immoral outcomes.

So, my clients live on the bubble. Too poor to compete for market rent in a market distorted by government intervention. Too stable to qualify for immediate housing. Stuck on a line that only gets longer with the barest of care to tide them over.