NCPA


Excerpted From: Twenty Myths About National Health Insurance

December 1991
W63

Rationing by Location

Little is known about who gets care and who does not under non-price rationing schemes. Britain is one of the few countries that even publishes hospital waiting lists by region and for the country as a whole. Yet in England, as in other countries with national health insurance, rationing decisions are made by doctors and hospital personnel at the local level, and there is no national procedure to guarantee that those in greater need move to the front of the waiting lines.

A study of Norway’s health care system concluded that regional differences in waiting times constitute the most serious inequity in access to health care - more serious, for example, than the distribution of physicians or hospital beds. What is true of Norway is probably also true of other developed countries. For example:

"Health care rationing almost always penalizes rural residents."

These differences are greater than the regional differences in health care spending per person or other measures of health inputs. There are many reasons to believe that rural patients are at a disadvantage when health care is rationed. The most serious form of rationing is rationing of access to modern medical technology. Often this technology is available only at major hospitals in large cities. This need not be a problem if rural patients can purchase care with their own money or through public or private health insurance. Rationing by waiting, on the other hand, discriminates against rural patients.

For one thing, it often means that care is given to patients who are available when an opening appears in the surgery schedule. Urban patients who live close by thus have an advantage over rural patients who may have to travel considerable distances, requiring both time and inconvenience.

For another thing, success in obtaining care often depends on the politics of bureaucracy. A patient who is represented by a physician in a rural area will tend to be at a disadvantage vis-à-vis a patient represented by a physician who lives nearby and is a colleague of the hospital staff. Urban patients also have access to political and personal relationships that may be important in dealing with bureaucratic obstacles - opportunities not generally available to rural patients.

Finally, wherever there is non-price rationing, people will attempt to move to the head of the waiting lines by paying illegal bribes. In Hungary, the practice of "tipping" has become institutionalized, and each year physicians receive tips equal to about 40 percent of their official total income. In Japan an illegal "gift" of $1,000 to $3,000 can get a patient admitted sooner and insure treatment by a senior specialist at a Tokyo University hospital. In most countries, rural residents probably know less about the mechanics of currying physicians’ favors.

Rural Patients in Britain.

The most important philosophical principle advocated by those who established the British National Health Service was equal access to health care. Yet as we noted above, inequalities across England persist and may even have grown worse since the NHS was founded in 1948. For example, the North East Thames region (near London) has 27 percent more doctors and dentists per person, 15 percent more hospital beds and 12 percent more total health spending than the Trent region (in the more rural northern part of the country). These inequalities do not reflect differences in need. Northerners die younger and are less healthy than southerners.

"Britain spends the most in those regions where the need is smallest."

One way to appreciate the magnitude of these inequalities is to consider them in relation to the growing private health care sector. If the goal of the NHS is to equalize access, one would expect the service to devote more resources to those areas least well served by the private sector. In fact, the British government tends to spend the most in the metropolitan areas where private sector alternatives are most abundant.

"British urban regions with the most private hospital beds tend to receive the most government spending."

Table I lists the regions of England by the number of private beds available per person. Although the correlation is not perfect, in general the more private beds a region has, the greater its odds of also enjoying above-average public hospital spending. For example, as Figure I shows:

"Government spending exacerbates private inequalities between urban N.W. Thames and rural Trent."

Rural Patients in Canada.

Canada, too, has proclaimed equal access to health care a national goal. Yet there is little evidence of success in achieving it:"Canadian rural residents are less likely to see any type of specialist than urban residents."

As noted above, health care in Canada tends to be hospital-based, with modern technology restricted to teaching hospitals and outpatient surgery discouraged. Moreover, specialists and major hospitals tend to be in major cities. As in other countries, rural residents often travel to the larger cities for medical care. How often does that happen? A major new study produced at the University of British Columbia provides the answer.

Since doctors are paid on a fee-for-service basis in Canada, fee-for-service income is a good measure of the value of services actually rendered to patients. By using physician billing data, Canadian researchers determined the regional hospital district in which each patient lived - even if the service was provided in some other district. As Table II and Figure II show:

These are the broad averages. The discrepancies are even worse between urban areas and British Columbia’s most underserved areas. Table III, for example, compares urban spending with spending in 12 other districts for selected services. As the table shows, even if we ignore the smallest districts and focus only on districts with at least 35,000 people, spending varies by a factor of almost 3 to 1 for all specialist services, almost 4 to 1 for OB/GYN services, 8 to 1 for internists and 35 to 1 for psychiatrists. The discrepancies are greater still among people in specific age and sex classifications in the regions, again ignoring the areas with the smallest populations. Roughly speaking:

Rural Patients in Latin America.

Although this study is focused primarily on developed countries, it is worth noting that many of the same principles apply to people living in less-developed countries. For example, people in urban areas of Brazil are far more successful in getting government benefits than are those in rural areas. By most measures, the need for health care is greater in the north/northeast (rural) areas than in the south/central (urban) areas. Life expectancy at birth, for example, is about three years longer for both men and women in the cities. Yet although most health care spending flows through government and several government programs were designed to create equal access to care, the spending is concentrated in the cities. About one-third of the population lacks regular access to medical care:"Under Latin American national health insurance, city dwellers almost always get the best health care."

Brazil is not unique. In neighboring Venezuela, government-provided health care is theoretically free to everyone. Yet the vast majority of health care services are provided in the cities. Similarly, a doctor in Bolivia is seven times more likely to practice in an urban area (where less than half the population resides) than in the countryside. And in Mexico " where health care is a constitutional right " 35 percent of the population (mainly in the cities) consumes 85 percent of the country’s health care resources.

Rural Patients in Communist Countries.

It is worth noting that many of the same principles apply to nondemocratic countries. Within communist or formerly communist countries, the variation in rural/urban characteristics is enormous. Throughout the Soviet Union and Eastern Europe, for example, inequality between urban and rural health care is widespread. In general, the urban populations are healthier and have better access to health care. In the Soviet Union, health care resources appear to matter a great deal. Indeed, the availability of doctors, nurses and hospital beds explains 55 percent of the variation in infant mortality there. For Bulgaria, Czechoslovakia, Hungary and Poland, the relationships between health care resources and health outcomes are less clear.

"In the Soviet Union, life expectancy in rural areas has been falling."

Despite the fact that the Soviet Union was committed to the principle of equal access to health care for over 70 years, there is evidence that inequality in access to medical resources and health outcomes grew.


Home | Support Us | All Issues | Social Security | Debate Central | Contact Us

Dallas Headquarters: 12770 Coit Rd., Suite 800 - Dallas, TX 75251-1339 - 972/386-6272 - Fax 972/386-0924
Washington Office: 601 Pennsylvania Ave. NW, Suite 900 South Building - Washington, DC 20004 - 202/220-3082 - Fax 202/220-3096
© 2001 NCPA